A line of transgenic mice was generated that contains an insertional mutation causing a phenotype similar to human autosomal recessive polycystic kidney disease. Homozygotes displayed a complex phenotype that included bilateral polycystic kidneys and an unusual liver lesion. The mutant locus was cloned and characterized through use of the transgene as a molecular marker. Additionally, a candidate polycystic kidney disease (PKD) gene was identified whose structure and expression are directly associated with the mutant locus. A complementary DNA derived from this gene predicted a peptide containing a motif that was originally identified in several genes involved in cell cycle control.