The homeobox containing gene HOP (Homeodomain Only Protein) was identified in the developing heart and lung where it functions downstream of Nkx2.5 and Nkx2.1 to modulate cardiac and lung gene expression. Previously, we found that HOP was downregulated in lung cancer. In this study, we constructed an expression vector containing the full‐length cDNA of HOP and transfected it into a lung cancer cell line H2170. Stable transfection led to an increased expression of HOP confirmed by Northern blot analysis. HOP positive transfectants remarkably reduced the growth rate and the ability of anchorage‐independent growth in soft agar, and moreover suppressed the tumor formation in nude mice compared to controls. Transient transfection of Nkx2.1 into H2170 resulted in the overexpression of HOP, and correspondingly, siRNA silencing of Nkx2.1 reduced the expression of HOP in lung cancer cells. Treatment with a differentiation modulating agent 5‐bromodeoxyuridine (BrdU) led to restoration of HOP expression in a small cell lung cancer cell line H526. In 29 paired primary lung tumor samples, loss of heterozygosity (LOH) analysis was performed by using the 3 microsatellite markers D4S189, D4S231 and D4S392 around the region of chromosome 4q12 where HOP locates. LOH was only found in 4 out 23 cases (17.4%) indicating that allelic loss is a rare genetic event not responsible for the downregulation of HOP in lung cancer. Taken together, our data suggest that HOP is a potential tumor suppressor possibly involved in lung cancer differentiation, and functions downstream of Nkx2.1. © 2007 Wiley‐Liss, Inc.