The successful production of male gametes requires extensive and precise interactions between germ cells and surrounding testicular somatic cells. We have made use of the mRNA differential display technique to isolate genes involved in germ cell-Sertoli cell interaction. We have identified five differential cDNA bands by comparing RNA from Sertoli cells, spermatids and spermatid-Sertoli cell cocultures. One of the isolated cDNA fragments detected a 1. 4-kilobase (kb) testis- and spermatid-specific transcript (designated as THEG: testicular haploid expressed gene). Northern blot analysis on RNA from spermatids and spermatid-Sertoli cell cocultures demonstrated that Sertoli cells are required for the continued expression of THEG in spermatids. We found two alternatively spliced transcripts for the THEG gene with 1437 base pairs (bp) and 1375 bp by using reverse transcription-polymerase chain reaction. The two open reading frames of 376 amino acids and 181 amino acids coded for putative nuclear proteins. The gene is approximately 10 kb pairs in size, contains 8 exons, and was mapped on mouse chromosome 10 to region B5-C1. Comparison of the two cDNA sequences with the genomic sequence indicated that the smaller transcript lacks exon 4. The differential gene expression of THEG in spermatid-Sertoli cell coculture supports the relevance of germ cell-Sertoli cell interaction for gene regulation during spermatogenesis.