We report the independent isolation of a rearranged FGF-4 gene from a patient with chronic myeloid leukaemia. We show that the FGF-4 gene has been truncated 30 nucleotides 3' to the coding sequence and has been fused to the RNA processing signals from a putative unknown gene on chromosome 15. We demonstrate that the promoter region of the FGF-4 gene is active in NIH3T3 cells and is indeed necessary for transformation. Using the luciferase reporter assay we have shown that the FGF-4 5' flanking sequences possess easily detectable promoter activity in both F9 and HeLa cell lines. 5' deletion analysis of the FGF-4 promoter has delineated regions containing cis-acting elements of functional importance. These regulatory regions are common to both embryonal and somatic cell lines. Electrophoretic mobility shift assay, using nuclear extracts from F9 and HeLa cells, has allowed detection of DNA-protein interactions occurring in the functionally significant regions. Subsequent comparison of the human and murine FGF-4 promoters show that the regions of functional significance are highly conserved. We suggest that the FGF-4 gene may be suppressed through a distal suppressor locus and becomes active when separated from this suppressor.