Background: Normal hematopoietic development depends on the activity of the Ikaros transcription factor, which contains distinct zinc-finger domains that mediate DNA binding and protein dimerization. Mice homozygous for a transgene encoding a dominant-negative version of Ikaros that lacks the DNA-binding domain but not the dimerization domain have a more severe phenotype than Ikaros null mice. This observation suggests the presence of factor(s) that can dimerize with Ikaros and partially complement its function. One previously identified factor, Aiolos, probably serves this role in the lymphoid system; a related factor involved in hematopoietic progenitors remains unknown, however. Results: Here, we describe the cloning of an Ikaros-related gene, Hellos. Analysis of the primary sequences of Hellos, Ikaros and Aiolos revealed that the DNA-binding, transcriptional activation and dimerization domains are functionally conserved. Hellos activated transcription from Ikaros DNA-binding sites and could dimerize with itself, Ikaros or Aiolos. Expression of Helios was detected in the earliest hematopoietic sites of the embryo, in hematopoietic stem cells in the adult and was subsequently restricted to a subset of cells in the T cell lineage. Hellos co-localized with Ikaros and Aiolos proteins in macromolecular nuclear structures and formed stable complexes in vivo with the dominant-negative version of Ikaros. Conclusions: Distinct but overlapping expression patterns of members of the Ikaros gene family during hematopoiesis might result in the formation of different multimeric complexes that have specific roles in lineage progression. The preferential expression of Hellos in the earliest stages of hematopoiesis suggests that this gene functions predominantly in early progenitors. (C) Current Biology Ltd ISSN 0960-9822.