Glyoxalase 1 (Glo1) has been implicated in anxiety-like behavior in mice and in multiple psychiatric diseases in humans. We used mouse Affymetrix exon arrays to detect copy number variants (CNV) among inbred mouse strains and thereby identified a approximately 475 kb tandem duplication on chromosome 17 that includes Glo1 (30,174,390-30,651,226 Mb; mouse genome build 36). We developed a PCR-based strategy and used it to detect this duplication in 23 of 71 inbred strains tested, and in various outbred and wild-caught mice. Presence of the duplication is associated with a cis-acting expression QTL for Glo1 (LOD>30) in BXD recombinant inbred strains. However, evidence for an eQTL for Glo1 was not obtained when we analyzed single SNPs or 3-SNP haplotypes in a panel of 27 inbred strains. We conclude that association analysis in the inbred strain panel failed to detect an eQTL because the duplication was present on multiple highly divergent haplotypes. Furthermore, we suggest that non-allelic homologous recombination has led to multiple reversions to the non-duplicated state among inbred strains. We show associations between multiple duplication-containing haplotypes, Glo1 expression and anxiety-like behavior in both inbred strain panels and outbred CD-1 mice. Our findings provide a molecular basis for differential expression of Glo1 and further implicate Glo1 in anxiety-like behavior. More broadly, these results identify problems with commonly employed tests for association in inbred strains when CNVs are present. Finally, these data provide an example of biologically significant phenotypic variability in model organisms that can be attributed to CNVs.