The expression of the developmentally regulated insulin-like growth factor II (IGF-II) gene has been studied in somatic cell hybrids derived from rat liver cells. BRL3A cells, dedifferentiated variants of rat hepatocytes, producing high levels of IGF-II, were fused to BRL30E or FAO cells of the same embryonic lineage but not expressing detectable levels of IGF-II mRNA. We report here that the IGF-II gene is subject to extinction, since its specific RNA levels are decreased both in heterokaryons and stable cell hybrids. Transcriptional analysis in isolated nuclei from parental and hybrid cells showed that the IGF-II gene is transcribed at a similar rate in all cell types. Likewise, the stability of IGF-II cytoplasmic mRNA was equivalent in the high-expressing parental cells and in the hybrids. In contrast, the distribution of IGF-II mRNA between the nuclear and the cytoplasmic compartments differed markedly in parental and hybrid cell lines. The data presented show that the expression of the IGF-II gene is subject to a dominant negative control and suggest that the phenomenon involves mechanisms that operate at the posttranscriptional level.