We cloned a novel mouse cDNA, Mcpr1 (mouse cleft palate-related gene 1), between retinoic acid (RA)-treated murine embryonic palatal and control shelves by improved subtractive hybridization. Its transcript was identified by Northern blotting. The open reading frame encodes 132 amino acids and shows almost no identity to other genetic products. Mcpr1 expression could be detected extensively in adult mouse tissues and during murine embryonic development. It was identified to be significantly stimulated by RA in murine palatal shelves at embryonic day 12 and in palatal mesenchymal cells in vitro. We demonstrate that MCPR1 protein was localized primarily in the cytoplasm and could be synthesized and secreted by transfected COS-7 cells. Both the secretory and recombinant proteins of Mcpr1 inhibited proliferation of murine embryonic palatal mesenchymal cells and impeded the progression from the G1 to S phase in the cell cycle. The cells were prone to apoptosis after exposure to glutathione S-transferase-MCPR1. Furthermore, knockdown of MCPR1 protein levels by antisense oligodeoxynucleotides promoted progression of cells from the G1 to S phase and completely abolished the RA-induced block of the cell cycle from the G1 to S phase. These findings suggest that Mcpr1 might function as one of the RA-up-regulated genes involved in inhibiting cell proliferation during palatogenesis and RA-induced cleft palate by regulating proliferation and apoptosis of embryonic palatal mesenchymal cells and might even play a role in the development of many other organs.