Hydrolethalus syndrome (HLS) is an autosomal recessive lethal malformation syndrome characterized by multiple developmental defects of fetus. We have earlier mapped and restricted the HLS region to a critical 1 cM interval on 11q23-25. The linkage disequilibrium (LD) and haplotype analyses of single nucleotide polymorphism (SNP) markers helped to further restrict the HLS locus to 476 kb between genes PKNOX2 and DDX25. An HLS associated mutation was identified in a novel regional transcript (GenBank accession no. FLJ32915), referred to here as the HYLS1 gene. The identified A to G transition results in a D211G change in the 299 amino acid polypeptide with unknown function. The HYLS1 gene shows alternative splicing and the transcript is found in multiple tissues during fetal development. In situ hybridization shows spatial and temporal distributions of transcripts in good agreement with the tissue phenotype of HLS patients. Immunostaining of in vitro expressed polypeptides from wild-type (WT) cDNA revealed cytoplasmic staining, whereas mutant polypeptides became localized in distinct nuclear structures, implying a disturbed cellular localization of the mutant protein. The Drosophila melanogaster model confirmed these findings and provides evidence for the significance of the mutation both in vitro and in vivo.