Artemia has attracted much attention for its ability to produce encysted embryos wrapped in a protective shell when subject to extremely harsh environmental conditions. However, what the cyst shell is synthesized from and how the formative process is performed remains, as yet, largely unknown. Over 20 oviparous specifically expressed genes were identified through screening the subtracted cDNA library enriched between oviparous and ovoviviparous Artemia ovisacs. Among them, a shell gland-specifically expressed gene (SGEG) has been found to be involved in the cyst shell formation. Lacking SGEG protein (by RNA interference) caused the cyst shell to become translucent and the chorion layer of the shell to become less compact and pultaceous and to show a marked decrease of iron composition within the shell. The RNA interference induced defective diapause cysts with a totally compromised resistibility to UV irradiation, extremely large temperature differences, osmotic pressure, dryness, and organic solvent stresses. In contrast, the natural cyst would provide adequate protection from all such factors. SGEG contains a 345-bp open reading frame, and its consequentially translated peptide consists of a 33-amino acid residue putative signal peptide and an 81-amino acid residue mature peptide. The results of Northern blotting and in situ hybridization indicate that the gene is specifically expressed in the cells of shell glands during the period of diapause cyst formation of oviparous Artemia. This investigation adds strong insight into the mechanism of cyst shell formation of Artemia and may be applicable to other areas of research in extremophile biology.