Growth factors and growth inhibitors play crucial roles in the growth regulation and differentiation of mammary epithelial cells. Studies have shown that during pregnancy, with the onset of terminal differentiation, there is a dramatic decrease in the proliferation of the mammary epithelial cells. Here we report the cloning and characterization of a novel pregnancy-induced cDNA, OKL38, from a human ovarian cDNA library. This cDNA encodes for a protein of approximately 34.5 kDa. Tissue distribution studies through Northern analyses revealed the ubiquitous nature of OKL38 transcripts in most tissues, with the highest levels observed in the ovary, kidney, and liver. The onset and advancement of pregnancy also gave rise to a concomitant increase in OKL38 gene expression. In situ hybridization revealed that OKL38 mRNA was further detected in mammary secretory epithelial cells. However, low levels of OKL38 transcripts were observed in the various human breast cancer cell lines studied and were barely detectable in all dimethylbenz(A)anthracene-induced mammary tumors examined. Transfection studies with OKL38 cDNA with MCF-7 cells resulted in growth inhibition in vitro and reduction in tumor formation in vivo. These observations led to speculation that OKL38 may play a vital role in the growth regulation and differentiation of breast epithelial cells during pregnancy and its implications in tumorigenesis.