BACKGROUND: Deregulation of the Wnt/ beta-catenin signal transduction pathway has been implicated in the pathogenesis of tumours in the mammary gland, colon and other tissues. Mutations in components of this pathway result in beta-catenin stabilization and accumulation, and the aberrant modulation of beta-catenin/TCF target genes. Such alterations in the cellular transcriptional profile are believed to underlie the pathogenesis of these cancers. We have sought to identify novel target genes of this pathway in mouse mammary epithelial cells. METHODS: Gene expression microarray analysis of mouse mammary epithelial cells inducibly expressing a constitutively active mutant of beta-catenin was used to identify target genes of this pathway. RESULTS: The differential expression in response to DeltaNbeta-catenin for five putative target genes, Autotaxin, Extracellular Matrix Protein 1 (Ecm1), CD14, Hypoxia-inducible gene 2 (Hig2) and Receptor Activity Modifying Protein 3 (RAMP3), was independently validated by northern blotting. Each of these genes encodes either a receptor or a secreted protein, modulation of which may underlie the interactions between Wnt/beta-catenin tumour cells and between the tumour and its microenvironment. One of these genes, Hig2, previously shown to be induced by both hypoxia and glucose deprivation in human cervical carcinoma cells, was strongly repressed upon DeltaNbeta-catenin induction. The predicted N-terminus of Hig2 contains a putative signal peptide suggesting it might be secreted. Consistent with this, a Hig2-EGFP fusion protein was able to enter the secretory pathway and was detected in conditioned medium. Mutation of critical residues in the putative signal sequence abolished its secretion. The expression of human HIG2 was examined in a panel of human tumours and was found to be significantly downregulated in kidney tumours compared to normal adjacent tissue. CONCLUSIONS: HIG2 represents a novel non-cell autonomous target of the Wnt pathway which is potentially involved in human cancer.