We have isolated Kruppel-type (C2H2) zinc-finger genes, ZIM3 (zinc-finger gene 3 from imprinted domain) and ZNF264, located downstream of human and mouse USP29 genes (encoding ubiquitin-specific processing protease 29). In human, both ZIM3 and ZNF264 encode zinc-finger proteins with Kruppel-associated box (KRAB) A and B domains at the amino-terminal regions of the predicted proteins. In contrast, mouse Zim3 and Zfp264 seem to have lost protein-coding capability based on the lack of open reading frames (ORFs) in their cDNA sequences. In particular, the 3' end of the Zim3 transcript overlaps with the coding region of the adjacent gene Usp29 in an antisense orientation, indicating the conversion of mouse Zim3 into an antisense transcript gene for Usp29. The expression patterns of ZIM3 and ZNF264 have been largely conserved between human and mouse, with testis-specific expression of ZIM3 and ubiquitous expression of ZNF264, but high expression levels in adult testes in both species. Our studies also demonstrate that both mouse genes are imprinted with maternal expression of Zim3 in adult testes and paternal expression of Zfp264 in neonatal and adult brain. The reciprocal imprinting of two neighboring mouse genes, Zim3 and Zfp264, is consistent with a pattern observed frequently in other imprinted domains, and suggests that the imprinting of these two genes might be coregulated.