The chromosomal region 10q24 is involved in reciprocal translocations with one of the T-cell receptor loci in a significant proportion of human T-cell acute lymphoblastic leukemias. The breakpoints of these rearrangements cluster immediately upstream of the TLX1 homeobox gene and lead to its transcriptional activation. Genomic analysis using sequences located on the opposite side of the breakpoint cluster region identified a novel gene composed of three exons that is oriented in a head-to-head manner with TLX1. The novel gene, named TDI (TLX1 divergent) codes for a 1.9 kb transcript with an atypically long 5' leader sequence. Although predicted to be a transcriptional regulator of 13.4 kDa, the TDI protein has no significant sequence similarity to any known protein. The TLX1 and TDI genes are separated by a short spacer of only 161 bp that contains numerous GC boxes and a centrally located CCAAT box embedded within a CpG island. Using luciferase as the reporter in transient transfection assays, the intergenic region was found to be a functional promoter with robust bidirectional activity. TLX1 and TDI thus appear to represent another example of a divergently transcribed gene pair whose expression is regulated by a common promoter. Our finding that TDI is transcriptionally co-activated in leukemic cells that aberrantly express TLX1, additionally suggests that it may have the potential to act as a co-operating oncogene in leukemogenesis.