Background We have used suppression subtractive hybridization to construct a subtracted cDNA library of hepatocellular carcinoma (HCC) and isolated a panel of differential expression sequence tag (ESTs). By using bioinformatics and rapid amplification of cDNA ends (RACE), we found a novel HCC-associated gene IDD01.To further investigate its function, a recombinant eukaryotic vector pEGFP/ORF was constructed and transfected into the HepG2 cell line.Methods The open reading frame (ORF) of IDD01 was amplified by RT-PCR, digested with Bamh I and Hind Ⅲ, and subcloned into the pEGFP-C 1 vector. The ligation reaction was conducted with T4 DNA ligase, and the recombinant vector was named pEGFP/ORF. Untransfer control (control group), pEGFP-C 1 (HepG2/C 1 group)and pEGFP/ORF (HepG2/ORF group) transfer groups were designed. Gene transfer was conducted with lipofectamine. To obtain stable transfection in HepG2 cells, selection was initiated with 500μg/ml G418. Cellular IDD01 mRNA levels were assayed by semi-quantitative RT-PCR. The MTT colorimetric method and flow cytometry were used to determine the cell proliferation. The tumorigenic potential of transformed cells was determined from their ability to grow as anchorage-independent colonies on soft agar. Transient transfections were performed to observe subcellular location of GFP-IDD01 fusion protein.Results A 778 bp specific band of ORF was obtained by RT-PCR, and the positive clone of recombinant plasmid pEGFP/ORF (5.5 Kb) was identified by restriction endonuclease cleavage and sequence. The brighmess ratio of IDD01 mRNA was not obvious between control and pEGFP/C1 groups, whereas the ratio of pEGFP/ORF was higher than that in the other two groups. After culture for 24-72 hours, the A490 values in pEGFP/ORF were higher than those in the other two groups (P＜0.01). On histograms of flow cytometry, the S phase ratio of HepG2/ORF cells was significantly higher than that of the control and HepG2/C1 groups. The HepG2/ORF cells were able to form more colonies in soft agar compared with other HepG2 cell lines (P＜0.01). GFP-IDD01 fusion protein predominantly localized in the plasma, whereas EGFP protein diffused all over the cell.Conclusion The IDD01 gene is a positive effector in cell proliferation and contributes to the carcinogenesis and progression of HCC. This gene may serve as a potential target for pharmaceutical intervention of HCC.