Somatic cell hydridization and linkage studies indicated the implication of a second gene as a cause of Niemann-Pick C disease in a minority (5%) of patients. A study of the lysosomal proteome led to the identification of a previously known gene, HE1, as the NPC2 gene. The mature NPC2/HE1 protein is a ubiquitous soluble small 132-amino-acid glycoprotein, first characterized as a major secretory protein in the human epididymis, but also detected in most tissues. Seventeen families with mutations in the NPC2 gene are known. Good genotype-phenotype correlations were observed. No distinction can be made between the biochemical phenotypes of NPC1 or NPC2 mutants. The NPC2 protein binds cholesterol with submicromolar affinity at neutral and acidic pH. The bovine protein has been crystallized, and the cholesterol-binding site assigned to a hydrophobic loosely packed region. There is strong evidence that the NPC1 and NPC2 proteins must function in a closely related fashion. Current data have led to the hypothesis that NPC2 would bind cholesterol from internal lysosomal membranes, enabling a physical interaction with NPC1 (or another protein) and allowing postlysosomal export of cholesterol. In this model, the activity of NPC1 would depend on that of NPC2. The precise function of the NPC2 protein has, however, not been fully elucidated.