To investigate abnormalities in gene expression associated with cyst formation in polycystic kidney disease, differential cDNA library screening was carried out using RNA from normal and cystic kidneys of the C57BL/6J-cpk mouse. Among a number of genes found to be abnormally expressed was one (cDNA clone 56-1) that was significantly underexpressed in cystic kidneys. Hybridization analyses revealed that the 56-1 mRNA is expressed primarily in kidney and liver, and that the kidney expression begins postnatally and continues in the adult. Expression of this mRNA was found to be significantly decreased upon acute renal injury induced by a single intraperitoneal injection of folic acid, and to return to normal levels upon recovery of kidney function. Analysis of the cDNA sequence predicted a protein of 349 amino acids (aa), which was confirmed by in vitro translation of a sense-strand transcript, producing a protein of approx. 39 kDa. The aa sequence shows similarity to Flavobacterium sp. and Pseudomonas diminuta parathion hydrolase (phosphotriesterase or PTE), an enzyme that hydrolyzes toxic organophosphates and other phosphotriesters, and to the predicted product of an Escherichia coli open reading frame of unknown function (phosphotriesterase homology protein or PHP). Use of optimal alignment programs demonstrated a significant overall homology between the bacterial and mouse sequences, with greater than 50% aa sequence similarity. This cDNA represents the first eukaryotic sequence showing similarity to these prokaryotic genes. Based on this apparent homology, it has been named mpr56-1 (for mouse phosphotriesterase-related 56-1).