To study the biological function of EDAG-1, a novel gene cloned by our lab recently, the EDAG-1 cDNA was subcloned into pcDNA3. 1(+) vector and transfected into NIH3T3 cells by Lipofect AMINE methods. Overexpression of EDAG-1 in NIH3T3 cells resulted in loss of cell contact inhibition, anchorage-independent growth in soft agar and tumor formation in nude mice. These results suggest that EDAG-1 is a transforming gene and may be associated with the development of tumors, especially in hematopoietic system.