SMAD5, a transducer of TGF-beta/BMP inhibitory signals and a tumor suppressor candidate, localizes to the region of invariant loss in human myeloid neoplasms, on chromosome 5q31.1. Recent evidence indicates a gene-dosage effect along the TGF-beta/BMP signaling pathways. We have identified a novel transcript. designated DAMS, whose 3' exonic sequences contain in part an alternate 5' exon of SMAD5, in the antisense orientation. Expressed sequenced tags (ESTs) for DAMS are found in fetal tissues (heart, adrenal glands, and total fetus) and pancreatic tumor cDNA libraries. In contrast to SMAD5, DAMS expression is not readily detectable in adult and fetal tissues. Semiquantitative PCR suggests that the stoichiometry between SMAD5 and DAMS transcripts ranges between 15 and 120 in normal and malignant hematopoietic cells. The findings raise the possibility that DAMS may be a fail-safe mechanism for precise regulation of SMAD5 transcript levels that may be critical in maintaining normal homeostasis. (C) 1999 Academic Press.