A significant challenge in the post-genomic era is how to prioritize differentially expressed and uncharacterized novel genes found in hepatocellular carcinoma (HCC) microarray profiling. One such category is cell cycle regulated genes that have only evolved in higher organisms but not in lower eukaryotic cells. Characterization of these genes may reveal some novel human cancer-specific abnormalities. A novel transcript, FLJ10540 was identified. FLJ10540 is overexpressed in HCC as examined by quantitative reverse transcription-polymerase chain reaction and immunohistochemistry. The patients with higher FLJ10540 expression had a poor survival than those with lower FLJ10540 expression. Functional characterization indicates that FLJ10540 displays a number of characteristics associated with an oncogene, including anchorage-independent growth, enhanced cell growth at low serum levels and induction of tumorigenesis in nude mice. FLJ10540-elicited cell transformation is mediated by activation of the phosphatidylinositol 3'-kinase (PI3K)/AKT pathway. Moreover, FLJ10540 forms a complex with PI3K and can activate PI3K activity, which provides a mechanistic basis for FLJ10540-mediated oncogenesis. Together, using a combination of bioinformatics searches and empirical data, we have identified a novel oncogene, FLJ10540, which is conserved only in higher organisms. The finding raises the possibility that FLJ10540 is a potential new therapeutic target for HCC treatment. These findings may contribute to the development of new therapeutic strategies that are able to block the PI3K/AKT pathway in cancer cells.