The role of chromosomal proteins in maintaining the structure and regulating the function of chromatin and chromosomes in normal and neoplastic cells is investigated. Present efforts are concentrated on determining the cellular function of two non-histone chromosomal proteins, HMG-14 and HMG-17, which may be involved in modulating the structure of transcriptionally active chromatin. We have isolated and sequenced the complete genes coding for both human and chicken chromosomal proteins HMG-14 and HMG-17. Analysis of protein and mRNA levels in several human cell lineages revealed that although the ratio of HMG-14 and HMG-17 mRNA varies among human cell lines, these variations are small. The expression of HMG-14 and HMG-17 is down regulated during both myogenesis and erythropoiesis, suggesting that tissue differentiation is associated with a diminished requirement for these proteins. The findings are consistent with a role for the proteins in chromatin patterning. The structure of the HMG-14 and HMG-17 proteins is remarkably similar to that of transcriptional activators such as GAL4 and GCN4. The DNA binding domain of HMG-14 and HMG-17 is conserved over an evolutionary span of 800 million years. The C-terminal region is negatively charged. Helical wheel projections of the C-terminal regions reveal that the negative charges are clustered on one face of the helix. The ability of HMG proteins to function as transcriptional activators has been studied in yeast cells expressing lex A-HMG fusion proteins which bind to reporter molecules containing the b gel gene downstream from the lex A operator. The results suggest that the proteins may function as pseudotranscriptional activators, perhaps by modulating the binding of the true transcriptional activators. The gene for HMG-14 has been mapped to human chromosome 21 to the region associated with pathogenesis of Down's syndrome and is expressed in a direct gene dosage manner. Since chromosomal protein HMG-14 may modulate the structure of transcriptionally active chromatin, an imbalance in this protein may have a pleiotropic effect and influence the expression of many genes.