The glycogen phosphorylase-2 gene is developmentally regulated and plays a central role in cellular differentiation in Dictyostelium. There are two isozymes of glycogen phosphorylase, GP1 and GP2. Both forms are developmentally regulated; gp1 is expressed in undifferentiated cells and gp2 during differentiation. We report here the identification, purification, and cloning of a second gp2 DNA-binding factor called TF2. This protein demonstrates a high specificity for a transcriptional regulatory element, the 5' C box. TF2 was first detected with electrophoretic mobility shift assays of DEAE chromatographic fractions of cell-free extracts. The specificity of TF2 for the 5' C box was tested by competition analysis using six other oligonucleotides. Purification of TF2 was achieved by ion-exchange chromatography, DNA affinity chromatography, gel filtration chromatography, and preparative SDS-PAGE. SDS-PAGE analysis indicated an apparent subunit molecular weight of 28 kDa. The apparent molecular weight of the native protein as estimated by gel filtration was about 53 kDa. This suggested that TF2 binds gp2 as a homodimer. Southern blot analysis indicated that there is only one form of the tf2 gene. Northern analysis showed little or no expression of tf2 in undifferentiated cells. During development tf2 expression increases up to a maximum at 8 h and then decreases in later stages. Attempts to disrupt the gene suggest that tf2 mutation may be lethal.