Tumor-specific alteration of the TAL1 gene occurs in almost 25% of patients with T-cell acute lymphoblastic leukemia (T-ALL). We now report the identification of TAL2, a distinct gene that was isolated on the basis of its sequence homology with TAL1. The TAL2 gene is located 33 kilobase pairs from the chromosome 9 breakpoint of t(7;9)(q34;q32), a recurring translocation specifically associated with T-ALL. As a consequence of t(7;9)(q34;q32), TAL2 is juxtaposed with sequences from the T-cell receptor beta-chain gene on chromosome 7. TAL2 sequences are actively transcribed in SUP-T3, a T-ALL cell line that harbors the t(7;9)(q34;q32). The TAL2 gene product includes a helix-loop-helix protein dimerization and DNA binding domain that is especially homologous to those encoded by the TAL1 and LYL1 protooncogenes. Hence, TAL2, TAL1, and LYL1 constitute a discrete subgroup of helix-loop-helix proteins, each of which can potentially contribute to the development of T-ALL.