A line of transgenic mice has been identified with a recessive defect in lymphocyte or granulocyte function, presumably as a result of insertional mutagenesis by the integrated transgene. Transgenic mice homozygous for the transgene integrant showed nearly complete absence of lymphocytes in peripheral lymph nodes and Peyer's patches, a severely diminished thymus medulla, and a greatly enlarged spleen. These animals also developed a syndrome characterized by granulocyte and mononuclear infiltrates in numerous tissues, including skin, liver, and lung, and immunoglobulin deposits in kidney glomeruli. Lung infiltrates were specifically localized around large blood vessels and bronchi, accompanied in some cases by destruction of arterial walls. The light scatter profile of spleen lymphocytes suggested an extremely high percentage of blast cells. Because tissue development and morphology appears to be normal in all other tissues observed, the genetic lesion appears to specifically affect the regulation of lymphocyte or granulocyte activation.