H-2Z1 is an enhancer trap transgenic mouse line in which the lacZ reporter delineates the somatosensory area of the cerebral cortex where it is expressed in a subset of layer IV neurons. In the search of somatosensory specific genes or regulatory sequences, we mapped the H-2Z1 transgene insertion site to chromosome 17, 100 and 460 kb away fromTbc1d5andSatb1flanking genes. We show here that insertion of the H-2Z1 transgene results in three distinct outcomes. First, a genetic background-sensitive expression oflacZin several brain and body structures. While four genes in a 1 Mb region around the insertion are expressed in the barrel cortex, H-2Z1 expression resembles more that of its two direct neighbors. Moreover, H-2Z1 closely reports most of the body and brain expression sites of theSatb1chromatin remodeling gene including tooth buds, thymic epithelium, pontine nuclei, fastigial cerebellar nuclei, and cerebral cortex. Second, the H-2Z1 transgene causes insertional mutagenesis ofTbc1d5andSatb1, leading to a strong decrease in their expressions. Finally, insertion of H-2Z1 affects the differentiation of a subset of cortical GABAergic interneurons, a possible consequence of downregulation of Satb1 expression. Thus, the H-2Z1 “somatosensory” transgene is inserted in the regulatory landscape of two genes highly expressed in the developing somatosensory cortex and reports for a subdomain of their expression profiles. Together, our data suggest that regulation of H-2Z1 expression results from local and remote genetic interactions.