The ETS family of proteins is a large group of transcription factors implicated in many aspects of normal hematopoietic development, as well as oncogenesis. For example, the TEL1/ETV6 (TEL1) gene is required for normal yolk sac angiogenesis, adult bone marrow hematopoiesis, and is rearranged or deleted in numerous leukemias. This report describes the cloning and characterization of a novel ETS gene that is highly related to TEL1 and is therefore called TEL2. The TEL2 gene consists of 8 exons spanning approximately 21 kilobases (kb) in human chromosome 6p21. Unlike the ubiquitously expressed TEL1 gene, however, TEL2 appears to be expressed predominantly in hematopoietic tissues. Antibodies raised against the C-terminus of the TEL2 protein were used to show that TEL2 localizes to the nucleus. All ETS proteins can bind DNA via the highly conserved ETS domain, which recognizes a purine-rich DNA sequence with a GGAA core motif. DNA binding assays show that TEL2 can bind the same consensus DNA binding sequence recognized by TEL1/ETV6. Additionally, the TEL2 protein is capable of associating with itself and with TEL1 in doubly transfected Hela cells, and this interaction is mediated through the pointed (PNT) domain of TEL1. The striking similarities of TEL2 to the oncogenic TEL1, its expression in hematopoietic tissues, and its ability to associate with TEL1 suggest that TEL2 may be an important hematopoietic regulatory protein.