Insertional mutagenesis was investigated in a transgenic mouse strain (HUGH/4) derived from a fertilized egg injected with plasmid DNA containing the human growth hormone gene. Lethality occurred in homozygous embryos and was traced to the egg cylinder stage on days 4 to 5 of gestation, shortly after implantation. The mutation is on chromosome 12 and is distinct in location and integration pattern from another mutation also leading to lethality of homozygotes in the egg cylinder stage. Based on this and other evidence, relatively many genes may be recruited to activity near the time of implantation and may therefore present a large target of vulnerability to mutagenesis. The single insert in HUGH/4, consisting of approximately three tandem copies of plasmid sequences, is flanked by mouse cellular sequences that have undergone rearrangements, including a probable deletion. The data suggest the hypothesis that DNA rearrangements, which appear to be commonplace in transgenic mice, may arise because the initial insertional complex is unstable; stepwise changes may then be generated until a more stable conformation is achieved.