The DIO-1 (death inducer-obliterator-1) gene, identified by differential display PCR in pre-B WOL-1 cells undergoing apoptosis, encodes a putative transcription factor whose protein has two Zn finger motifs, nuclear localization signals, and transcriptional activation domains, expressed in the limb interdigitating webs during development. When overexpressed, DIO-1 translocates to the nucleus and activates apoptosis in vitro. Nuclear translocation as well as induction of apoptosis are lost after deletion of the nuclear localization sequences. DIO-1 apoptotic induction is prevented by caspase inhibitors and Bcl-2 overexpression. The in vivo role of DIO-1 was studied by misexpressing DIO-1 during chicken limb development. The most frequently observed phenotype was an arrest in limb outgrowth, an effect that correlates with the inhibition of mesodermal and ectodermal genes involved in this process. Our data demonstrate the ability of DIO-1 to trigger apoptotic processes in vitro and suggest a role for this gene in cell death during development.