A novel gene that is down-regulated in lungs of T/ebp/Nkx2.1-null mouse embryos has been identified using a suppressive-subtractive hybridization method. The gene product is a secreted protein, forms a homodimer, and exhibits an amino acid sequence similar to that seen in the uteroglobin/Clara cell secretory protein family of proteins. This gene, designated Ugrp1 (uteroglobin-related protein 1), consists of three exons and two introns and produces three transcripts by alternative splicing. The Ugrp1 gene was localized by fluorescence in situ hybridization to mouse chromosome 18 at region 18C-D; this region is homologous with human 5q31-34, where one of the asthma susceptibility genes has been assigned. UGRP1 mRNA is predominantly expressed in the lung, with low levels of expression in the thyroid. Expression in the lung is detectable as early as embryonic day 12.5 and increases markedly by embryonic day 16.5. In T/ebp/Nkx2.1-null embryo lungs, UGRP1 expression was significantly reduced as assessed by RT-PCR analysis. Cotransfection assays using a T/EBP/NKX2.1 expression construct with Ugrp1 promoter-luciferase reporter constructs confirmed that T/EBP/NKX2.1 regulates Ugrp1 gene activity at the transcriptional level. Thus, Ugrp1 is a downstream target gene for the T/EBP/NKX2.1 homeodomain transcription factor. Changes in UGRP1 mRNA levels in lungs from antigen-sensitized mice suggest the possible involvement of UGRP1 in inflammation.