Tissue-specific extinguisher 1 (TSEl) is a trans-acting locus on human chromosome 17 that down-regulates expression of seven liver genes in hepatoma x fibroblast hybrids. To study the mechanism by which TSEl functions, we used subtractive cDNA hybridization to clone transcripts encoded within a 2-4 Mb segment of chromosome 17 that includes TSEl. High resolution mapping within this region indicated that 8 of 9 different human cDNAs so obtained were distinct from TSEl. The remaining cDNA clone mapped concordantly with TSEl in a panel of fragment-containing hybrids. DNA sequencing indicated that this cDNA encoded regulatory subunit Rla of CAMP-dependent protein kinase, and Rla mRNA levels correlated with TSEl activity in various hybrid lines. Stable transfection of wild-type or CAMP-binding mutant Rla alleles into hepatoma recipients produced an extinction phenotype indistinguishable from that encoded by human TSEl. We conclude that TSEl encodes a regulatory subunit of protein kinase A whose activity differs in different cell types.