Mouse P19 embryonal carcinoma cells can be reproducibly differentiated into neurons and glial cells upon treatment with high concentrations of retinoic acid (RA). To understand the molecular mechanisms that control early neural differentiation, we constructed P19 cell lines carrying an insertion of a gene-trap vector containing lacZ as the reporter gene and a G418 resistance gene. We tested expression of the lacZ gene during the RA-induced differentiation process of 300 clones selected with G418. Ten of these clones were stained with X-gal, and five of these ten clones showed up- or down-regulation of lacZ expression. We analyzed one clone, GT1, in which expression of the lacZ gene was markedly up-regulated. The 5'-flanking genomic DNA of the GT1 gene present at the site of integration was isolated by the plasmid rescue method, and we screened a cDNA library using this DNA gene as a probe. The GT1 cDNA is about 9000 bp long, with an open reading frame encoding 1840 amino acids. This amino acid sequence has a potential glycosaminoglycan attachment site (Ser-Gly-Gly-Gly) and three N-linked glycosylation sites, but no signal peptide. The sequence of GT1 does not show significant homology with any other known proteins, suggesting that GT1 may be a novel proteoglycan core protein. In situ hybridization revealed that GT1 mRNA was expressed ubiquitiously in the adult mouse brain. This expression was specifically localized in neurons but not in glial cells. Immunohistochemistry revealed that GT1 protein was also localized in neurons. These results suggest that this protein may play a fundamental role in neurons.