PCR analysis of DNA from a selected panel of human-rodent somatic cell hybrids and fluorescent in situ hybridization (FISH) analysis allowed us to localize the human ELE1 gene. This previously uncharacterized gene is fused with the tyrosine kinase (tk) domain of the RET proto-oncogene to generate the oncogenic sequence RET/PTC3, thus providing a third example of RET oncogenic activation in papillary thyroid carcinomas. ELE1 was localized to band 10q11.2, the subband where RET also maps, at a minimum distance of more than 500 kb from the proto-oncogene. The fusion event corresponding to the rearrangement reciprocal to that leading to the formation of RET/PTC3 was also identified and characterized. The karyotype of two RET/PTC3 positive tumors did not show any evidence of chromosome 10 abnormalities. The data indicate that a cytogenetically undetectable paracentric inversion within 10q11.2 generates RET/PTC3.