The osteogenic growth peptide (OGP) is an extracellular mitogen identical to the histone H4 (H4) COOH-terminal residues 90-103, which regulates osteogenesis and hematopoiesis. By Northern analysis, OGP mRNA is indistinguishable from H4 mRNA. Indeed, cells transfected with a construct encoding [His102]H4 secreted the corresponding [His13]OGP. These results suggest production of OGP from H4 genes. Cells transfected with H4-chloramphenicol acetyltransferase (CAT) fusion genes expressed both "long" and "short" CAT proteins. The short CAT was retained following an ATG --> TTG mutation of the H4 ATG initiation codon, but not following mutation of the in-frame internal ATG85 codon, which, unlike ATG1, resides within a perfect context for translational initiation. These results suggest that a PreOGP is translated starting at AUG85. The translational initiation at AUG85 could be inhibited by optimizing the nucleotide sequence surrounding ATG1 to maximally support upstream translational initiation, thus implicating leaky ribosomal scanning in usage of the internal AUG. Conversion of the predicted PreOGP to OGP was shown in a cell lysate system using synthetic [His102]H4-(85-103) as substrate. Together, our results demonstrate that H4 gene expression diverges at the translational level into the simultaneous parallel production of both H4, a nuclear structural protein, and OGP, an extracellular regulatory peptide.