We have cloned the genomic breakpoints for a balanced t(14;21)(q11.2;q22) chromosomal translocation associated with T-cell acute lymphoblastic leukemia. Sequence analysis of the genomic breakpoints indicated that the translocation had been mediated by an illegitimate V(D)J recombination event that disrupted the T-cell receptor (TCR) α locus and placed the TCR α locus enhancer on the derivative 21 chromosome. We identified a previously unreported transcript, designated BHLHB1 (for basic domain, helix-loop-helix protein, class B, 1) that had been activated by the translocation. BHLHB1 mapped to the region of chromosome 21 that has been proposed to be responsible, at least in part, for the learning deficits seen in children with Down's syndrome. Although BHLHB1 expression normally is restricted to neural tissues, T-cell lymphoblasts with the t(14;21)(q11.2;q22) also expressed high levels of BHLHB1 mRNA. Expression of BHLHB1 dramatically inhibited E2A-mediated transcription activation in NIH 3T3 fibroblasts and Jurkat T cells. This observation suggests that BHLHB1, similar to SCL/TAL1, may exert a leukemogenic effect through a functional inactivation of E2A or related proteins.