BACKGROUND: Dictyostelium life cycle consists of two distinct phases - growth and development. The control of growth-differentiation transition in Dictyostelium is not completely understood, and only few genes involved in this process are known. RESULTS: We have isolated a REMI (restriction enzyme-mediated integration) mutant, which prematurely initiates multicellular development. When grown on a bacterial lawn, these cells aggregate before the bacteria are completely cleared. In bacterial suspension, mutant cells express the developmental marker discoidin Igamma even at low cell densities and high concentrations of bacteria. In the absence of nutrients, mutant cells aggregate more rapidly than wild type, but the rest of development is unaffected and normal fruiting bodies are formed. The disrupted gene shows substantial homology to the recently described gdt1 gene, and therefore was named gdt2. While GDT1 and GDT2 are similar in many ways, there are intriguing differences. GDT2 contains a well conserved protein kinase domain, unlike GDT1, whose kinase domain is probably non-functional. The gdt2 and gdt1 mRNAs are regulated differently, with gdt2 but not gdt1 expressed throughout development. The phenotypes of gdt2- and gdt1- mutants are related but not identical. While both initiate development early, gdt2- cells grow at a normal rate, unlike gdt1- mutants. Protein kinase A levels and activity are essentially normal in growing gdt2- mutants, implying that GDT2 regulates a pathway that acts separately from PKA. Gdt1 and gdt2 are the first identified members of a family containing at least eight closely related genes. CONCLUSIONS: We have isolated and characterised a new gene, gdt2, which acts to restrain development until conditions are appropriate. We also described a family of related genes in the Dictyostelium genome. We hypothesise that different family members might control similar cellular processes, but respond to different environmental cues.