Mapping multiple QTL is a typical problem of variable selection in an oversaturated model because the potential number of QTL can be substantially larger than the sample size. Currently, model selection is still the most effective approach to mapping multiple QTL, although further research is needed. An alternative approach to analyzing an oversaturated model is the shrinkage estimation in which all candidate variables are included in the model but their estimated effects are forced to shrink toward zero. In contrast to the usual shrinkage estimation where all model effects are shrunk by the same factor, we develop a Bayesian method that allows the shrinkage factor to vary across different effects. The new shrinkage method forces marker intervals that contain no QTL to have estimated effects close to zero whereas intervals containing notable QTL have estimated effects subject to virtually no shrinkage. We demonstrate the method using both simulated and real data for QTL mapping. A simulation experiment with 500 backcross (BC) individuals showed that the method can localize closely linked QTL and QTL with effects as small as 1% of the phenotypic variance of the trait. The method was also used to map QTL responsible for wound healing in a family of a (MRL/MPJ x SJL/J) cross with 633 F(2) mice derived from two inbred lines.