CD3 zeta and eta chains are components of the T cell antigen receptor (TCR) complex and are transcribed from a common gene by alternative splicing. TCR complexes containing the zeta eta dimer have been thought to mediate different functions than complexes containing the zeta 2 dimer. To analyze the role of eta in the development and function of T cells, we generated eta-deficient mice without affecting zeta by gene targeting in embryonic stem cells. Homozygous mutant embryos developed normally. Unexpectedly, however, these mice exhibited high mortality soon after birth for unknown reason(s). Analysis of surviving homozygous animals revealed that the development and function of T cells were normal in the absence of the eta chain. Recently, the zeta/eta locus was reported to encode a transcription factor, Oct-1, on the opposite DNA strand. Our targeting strategy resulted in modulation of Oct-1 transcription--reduction of the authentic Oct-1 mRNA and induction of aberrant transcripts. Although differences in tissue distribution and DNA binding capacity of Oct-1 between wild-type and eta-deficient mice were not evident from in situ hybridization and gel shift analysis, the high mortality in the eta-deficient strain may well be due to the disturbance of Oct-1 transcription by the mutation in the zeta/eta locus. Such possible complexities have to be taken into account in the interpretation of gene targeting experiments.