Hepatocellular carcinoma is characterized by changes in gene expression associated with cell growth and differentiation. Cell surface antigenic changes have also been described based on differential antibody reactivity between normal and neoplastic liver. We obtained a novel tumor-associated cDNA designated TA1 on the basis of its differential expression between hepatoma cells and normal liver. Sequence analysis predicted a 723-base pair open reading frame with the deduced amino acid sequence encoding an integral membrane protein containing multiple hydrophobic transmembrane domains. Database searches revealed TA1 as the likely rat homologue of E16, a recently cloned human cDNA associated with lymphocyte activation. Although noncoding sequences diverged significantly, the 95% conservation of the predicted proteins between species strongly suggests an important, although as yet undefined, function in normal cells. TA1 transcripts were detected in normal adult rat tissues including testes, brain, ovary, spleen, mammary gland, and uterus with the highest steady-state expression in placenta. Although no expression was detected in normal liver, all rat hepatomas examined expressed an abundant 3.2-kilobase transcript. TA1 expression was closely associated with progression in this tumor model and suggests this molecule, originally linked to cell activation, also plays a role in the malignant phenotype.