BAI1 (brain-specific angiogenesis inhibitor 1) was originally isolated as a p53-target gene specifically expressed in brain. To clarify its function, we have been searching for cellular proteins that associate with the cytoplasmic domain of BAI1. Using its intracellular carboxyl terminus as "bait" in a yeast two-hybrid system, we isolated a cDNA clone named BAIAP2 whose nucleotide sequence would encode a 521-amino acid protein showing significant homology to a 58/53-kDa substrate of insulin-receptor kinase in the hamster. As the expression profile of BAIAP2 examined by Northern blot analysis was almost identical to that of BAI1, BAIAP2 appears to be active mainly in neurons. In vitro binding assays confirmed that a proline-rich cytoplasmic fragment of BAI1 interacted with the Src homology 3 (SH3) domain of BAIAP2. Double-color immunofluorescent analysis revealed that BAIAP2 was localized at the cytoplasmic membrane when it was coexpressed with BAI1 in COS-7 cells; BAIAP2 not associated with BAI1 was diffused in the cytoplasm. Predominant localization of BAI1 protein in a sub-cellular fraction enriched in growth cones indicated a possible role of BAI1 as a cell adhesion molecule inducing growth cone guidance. As a protein partner of BAI1, BAIAP2 may represent an important link between membrane and cytoskeleton in the process of neuronal growth.