The 8;21 translocation, t(8;21)(q22;q22.3), is seen only in acute myelogenous leukemia and is characteristically associated with the M2 subtype. Subsequent to our identification of the t(8;21) breakpoint region on chromosome 21, we reported that the translocation results in the fusion of the AML1 gene on chromosome 21 with a novel gene on chromosome 8 which we called ETO (for eight twenty-one). Recently, the AML1 portion of the fusion protein has been shown to correspond to the DNA-binding and dimerization domains of the mouse gene, polyoma enhancer binding protein 2 alpha B (pebp 2 alpha B). We report here the complete sequence of the ETO portion of the fusion transcript as compiled from complementary DNAs from a t(8;21) AML patient and compare this with the ETO sequence from a mouse brain transcript. The deduced amino acid sequences are 99% identical. ETO has several features consistent with it being a transcription factor. The ETO sequence is different from the portion of PEBP 2 alpha B it replaces in the AML1/ETO fusion protein, except for their common high content of proline, serine, and threonine residues. Because neither the putative zinc fingers nor the TAF110 homology domain of ETO is present in PEBP2 alpha B, one might expect functional differences in the ability of AML1/ETO protein to affect the levels of transcription of genes normally regulated to some degree by AML1 (PEBP2 alpha B) during myeloid differentiation. The relatively high levels of ETO in developing brain suggest that it could be involved in the regulation of some aspect of neural proliferation or differentiation.