A founder transgenic mouse harbored two different integration patterns of a transgene at the same locus, each of which gave rise to a similar autosomal recessive mutation. Mice of the mutant phenotype were of small stature but had normal levels of growth hormone. The disrupted locus was cloned, and a genetic and molecular analysis showed that the insertional mutants were allelic to a spontaneous mutant, pygmy. The mice should be a useful model for the growth hormone-resistant human dwarf syndromes and could lead to a greater understanding of the pathways involved in growth and development.