Chromosomal rearrangements provide an important resource for molecular characterization of mutations in the mouse. In(10)17Rk mice contain a paracentric inversion of approximately 50 Mb on chromosome 10. Homozygous In(10)17Rk mice exhibit a pygmy phenotype, suggesting that the distal inversion breakpoint is within the pygmy locus. The pygmy mutation, originally isolated in 1944, is an autosomal recessive trait causing a dwarf phenotype in homozygous mice and has been mapped to the distal region of chromosome 10. The pygmy phenotype has subsequently been shown to result from disruption of the Hmgi-c gene. To identify the In(10)17Rk distal inversion breakpoint, In(10)17Rk DNA was subjected to RFLP analysis with single copy sequences derived from the wild-type pygmy locus. This analysis localized the In(10)17Rk distal inversion breakpoint to intron 3 of Hmgi-c and further study determined that a fusion transcript between novel 5' sequence and exons 4 and 5 of Hmgi-c is created. We employed 5' RACE to isolate the 5' end of the fusion transcript and this sequence was localized to the proximal end of chromosome 10 between markers Cni-rs2 and Mtap7. Northern blot analysis of individual tissues of wild-type mice determined that the gene at the In(10)17Rk proximal inversion breakpoint is a novel muscle-specific gene and its disruption does not lead to a readily observable phenotype.