To identify genes misregulated in the final stages of breast carcinogenesis, we performed differential display to compare the gene expression patterns of the human tumorigenic mammary epithelial cells, HMT-3522-T4-2, with those of their immediate premalignant progenitors, HMT-3522-S2. We identified a novel gene, called anti-zuai-1 (AZU-1), that was abundantly expressed in non- and premalignant cells and tissues but was appreciably reduced in breast tumor cell types and in primary tumors. The AZU-1 gene encodes an acidic 571-amino-acid protein containing at least two structurally distinct domains with potential protein-binding functions: an N-terminal serine and proline-rich domain with a predicted immunoglobulin-like fold and a C-terminal coiled-coil domain. In HMT-3522 cells, the bulk of AZU-1 protein resided in a detergent-extractable cytoplasmic pool and was present at much lower levels in tumorigenic T4-2 cells than in their nonmalignant counterparts. Reversion of the tumorigenic phenotype of T4-2 cells, by means described previously, was accompanied by the up-regulation of AZU-1. In addition, reexpression of AZU-1 in T4-2 cells, using viral vectors, was sufficient to reduce their malignant phenotype substantially, both in culture and in vivo. These results indicate that AZU-1 is a candidate breast tumor suppressor that may exert its effects by promoting correct tissue morphogenesis.