Merle is a pattern of coloring observed in the coat of the domestic dog and is characterized by patches of diluted pigment. This trait is inherited in an autosomal, incompletely dominant fashion. Dogs heterozygous or homozygous for the merle locus exhibit a wide range of auditory and ophthalmologic abnormalities, which are similar to those observed for the human auditory-pigmentation disorder Waardenburg syndrome. Mutations in at least five genes have been identified as causative for Waardenburg syndrome; however, the genetic bases for all cases have not been determined. Linkage disequilibrium was identified for a microsatellite marker with the merle phenotype in the Shetland Sheepdog. The marker is located in a region of CFA10 that exhibits conservation of synteny with HSA12q13. This region of the human genome contains SILV, a gene important in mammalian pigmentation. Therefore, this gene was evaluated as a candidate for merle patterning. A short interspersed element insertion at the boundary of intron 10/exon 11 was found, and this insertion segregates with the merle phenotype in multiple breeds. Another finding was deletions within the oligo(dA)-rich tail of the short interspersed element. Such deletions permit normal pigmentation. These data show that SILV is responsible for merle patterning and is associated with impaired function of the auditory and ophthalmologic systems. Although the mutant phenotype of SILV in the human is unknown, these results make it an intriguing candidate gene for human auditory-pigmentation disorders.