A novel 150 kd protein expressed on the surface of mesenchymal cells of mouse embryonic tissues was identified. A monoclonal antibody to this molecule inhibited various processes of epithelial morphogenesis, such as hair follicle growth and lung epithelial tubular formation, in organ cultures of these tissues. Sequence analysis of cDNA encoding this protein revealed that it had 289 amino acids with a hydrophobic stretch at the C-terminus. NIH 3T3 cells transfected with the cDNA of this protein expressed the exogenous 150 kd protein on their surface. When lung epithelial cells were cocultured with these transfected cells, they showed normal tubular morphogenesis, but not with untransfected NIH 3T3 cells. These results indicate that this protein, termed epimorphin, plays a central role in epithelial-mesenchymal interactions.