Polycystic kidney disease (PKD) is characterized by multiple renal cysts, which ultimately result in renal failure. We have reported the identification of a new gene, Ke 6, within the major histocompatibilty complex, which is downregulated in two different mouse models of heritable PKD (N. Aziz, M. Maxwell, B. St.-Jacques, and B. M. Brenner. Mol, Cell. Biol. 13: 1847-1853, 1993). The Ke 6 gene gives rise to two transcripts, Ke 6a and Ke 6b. Ke 6a protein has significant homology to several mammalian and bacterial steroid dehydrogenases. The homology of Ke 6a protein to specific functional domains of the human and rat 11 beta-hydroxysteroid dehydrogenase enzyme (11 beta-HSD), which inactivates glucocorticoids, is substantial. We report here that the Ke 6 gene and the 11 beta-HSD gene are regulated in the same aberrant pattern in the cph mouse. The strong evidence for a critical role of steroids in cystogenesis leads us to propose that a possible elevation of intrahepatic and intrarenal steroid levels occurs in the cph mouse as a result of repression of steroid metabolic enzymes, which ultimately leads to development of cysts.