HLA-B-associated transcript 3 (BAT3) was originally identified as one of the genes located within human major histocompatibility complex. It encodes a large proline-rich protein with unknown function. In this study, we found that a fragment of the BAT3 gene product interacts with a candidate tumor suppressor, DAN, in the yeast-based two-hybrid system. We cloned the full-length rat BAT3 cDNA from a fibroblast 3Y1 cDNA library. Our sequence analysis has demonstrated that rat BAT3 cDNA is 3617 nucleotides in length and encodes a full-length BAT3 (1098 amino acids) with an estimated molecular mass of 114,801 daltons, which displays an 87.4% identity with human BAT3. The deletion experiment revealed that the N-terminal region (amino acid residues 1-80) of DAN was required for the interaction with BAT3. Green fluorescent protein-tagged BAT3 was largely localized in the cytoplasm of COS cells. Northern hybridization showed that BAT3 mRNA was expressed in all the adult rat tissues examined but predominantly in testis. In addition, the level of BAT3 mRNA expression was more downregulated in some of the transformed cells, including v-mos- and v-Ha-ras-transformed 3Y1 cells, than in the parental cells.