The mouse microphthalmia phenotype is complex and consists of one or more of the following phenotypic alterations: a lack of pigmentation, small eyes, a mast cell defect, and bone abnormalities. The locus for this allele has been assigned to chromosome 6. A single gene defect that produces such a pleiotropic effect has suggested some involvement at a control point in development. Recently a mutant line of mice carrying a transgene insertion, which represents a new allelic form of mi, was described. The integration site of the transgene from these mi(tg) mice was cloned and analyzed. An exon sequence was discovered adjacent to the insertion. Computer analysis of this nucleotide sequence revealed the presence of a motif indicative of the helix-loop-helix class of transcription factors. The gene was expressed in a number of tissues from wild type animals but was absent in the tissue RNA from mi(tg) mice. Southern blot analysis demonstrated a deletion of some of the genetic material for this gene in the mi(tg) mice. This is consistent with the lack of expression in the mi(tg) mice. Interestingly, when DNA from other mi allelic variants was subjected to a similar analysis, a deletion was also observed in this gene in two other mi lines. Taken together, these data suggest that the gene encoding this new helix-loop-helix DNA-binding protein, and residing in the mi locus, is a strong candidate for the mi gene.