The Sonic hedgehog (Shh)-Gli signaling pathway regulates development of many organs, including teeth. We cloned a novel gene encoding a transcription factor that contains a zinc finger domain with highest homology to the Gli family of proteins (61-64% amino acid sequence identity) from incisor pulp. Consistent with this sequence conservation, gel mobility shift assays demonstrated that this new Gli homologous protein, GliH1, could bind previously characterized Gli DNA binding sites. Furthermore, transfection assays in dental pulp cells showed that whereas Gli1 induces a nearly 50-fold increase in activity of a luciferase reporter containing Gli DNA binding sites, coexpression of Gli1 with Gli3 and/or GliH1 results in inhibition of the Gli1-stimulated luciferase activity. In situ hybridization analysis of mouse embryos demonstrated that GliH1 expression is initiated later than the three Gli genes and has a more restricted expression pattern. GliH1 is first detected diffusely in the limb buds at 10.0 days post coitus and later is expressed in the branchial arches, craniofacial interface, ventral part of the tail, whisker follicles and hair, intervertebral discs, teeth, eyes and kidney. LacZ was inserted into the GliH1 allele in embryonic stem cells to produce mice lacking GliH1 function. While this produced indicator mice for GliH1-expression, analysis of mutant mice revealed no discernible phenotype or required function for GliH1. A search of the Celera Genomics and associated databases identified possible gene sequences encoding a zinc finger domain with approximately 90% homology to that of GliH1, indicating there is a family of GliH genes and raising the possibility of overlapping functions during development.