We have isolated a novel gene from the Prader-Willi syndrome (PWS) smallest region of deletion overlap in proximal human chromosome 15q. IPW (Imprinted gene in the Prader-Willi syndrome region) was isolated using the direct selection method and yeast artificial chromosomes localized to the deletion region. IPW is spliced and polyadenylated but its longest open reading frame codes for only 45 amino acids, suggesting that it functions as an RNA, similar to H19 and XIST. The RNA is widely expressed in adult and fetal tissues and is found in the cytoplasmic fraction of human cells, which is also the case for the H19 non-translated RNA, but differs from the XIST RNA which is found predominantly in the nucleus. Using a sequence polymorphism, exclusive expression from the paternal allele in lymphoblasts and fibroblasts was demonstrated; monoallelic expression was found in fetal tissues. IPW is located about 150 kb distal to SNRPN, the only other known gene in the deletion interval, and about 50 kb proximal to the breakpoint of a translocation which defines the distal end of the PWS region and the proximal end of the Angelman syndrome (AS) region. As is the case with SNRPN, PWS patients with 15q11-q13 deletions do not express IPW, whereas expression is normal in Angelman syndrome patients. Lack of expression of IPW may contribute to the PWS phenotype directly. Alternatively, the mRNA product of IPW may play a role in the imprinting process, acting either on genes located proximally in the PWS region or distally in the AS region.