17p13.3 is one of the chromosomal regions most frequently affected by allelic loss in a variety of human neoplasms including lung cancer. A number of loss of heterozygosity (LOH) analyses have suggested the existence of a tumor suppressor gene at 17p13.3, distal to the p53 locus at 17p13.1. In the present study, we characterized a homozygous deletion at 17p13.3 in a small cell lung cancer cell line by constructing a bacterial artificial chromosome (BAC) contig and a restriction map surrounding the region, as well as by utilizing publicly available draft sequences. We defined the breakpoint, assigned and analysed two known genes, 14-3-3 epsilon and CRK, and a novel gene LOST1 within or at the end of the homozygous deletion of about 170 kb in size. Marked reduction of LOST1 expression was detected in 69% (11/16) of lung cancer specimens by quantitative real-time RT-PCR, while significant DNA hypermethylation was observed at the 5' end of the LOST1 gene in four of six lung cancer cell lines with negligible LOST1 expression. We also show here that a polymorphic marker D17S1174, which resides within the homozygous deletion, was apparently located in the middle of the minimum LOH region, providing further supportive evidence for the presence of a tumor suppressor gene(s) in this region.