Tissue-specific extinguisher 1 (TSE1) is a trans-acting locus on human chromosome 17 that down-regulates expression of seven liver genes in hepatoma x fibroblast hybrids. To study the mechanism by which TSE1 functions, we used subtractive cDNA hybridization to clone transcripts encoded within a 2-4 Mb segment of chromosome 17 that includes TSE1. High resolution mapping within this region indicated that 8 of 9 different human cDNAs so obtained were distinct from TSE1. The remaining cDNA clone mapped concordantly with TSE1 in a panel of fragment-containing hybrids. DNA sequencing indicated that this cDNA encoded regulatory subunit RI alpha of cAMP-dependent protein kinase, and RI alpha mRNA levels correlated with TSE1 activity in various hybrid lines. Stable transfection of wild-type or cAMP-binding mutant RI alpha alleles into hepatoma recipients produced an extinction phenotype indistinguishable from that encoded by human TSE1. We conclude that TSE1 encodes a regulatory subunit of protein kinase A whose activity differs in different cell types.