A novel cellular protein, Abl-interactor-1 (Abi-1), which specifically interacts with the carboxy-terminal region of Abl oncoproteins, has been identified in a mouse leukemia cell line. The protein exhibits sequence similarity to homeotic genes, contains several polyproline stretches, and includes a src homology 3 (SH3) domain at its very carboxyl terminus that is required for binding to Abl proteins. The abi-1 gene has been mapped to mouse chromosome 2 and is genetically closely linked to the c-abl locus. The gene is widely expressed in the mouse, with highest levels of mRNA found in the bone marrow, spleen, brain, and testes. The Abi-1 protein coimmunoprecipitates with v-Abl and serves as a substrate for kinase activity. When overexpressed in NIH-3T3 cells, abi-1 potently suppresses the transforming activity of Abelson leukemia virus expressing the full-length p160v-abl kinase but does not affect the transforming activity of viruses expressing a truncated p90v-abl or v-src kinases. We suggest that the Abi-1 protein may serve as a regulator of Abl function in transformation or in signal transduction.