Genetic reference populations in model organisms are critical resources for systems genetic analysis of disease related phenotypes. The breeding history of these inbred panels may influence detectable allelic and phenotypic diversity. The existing panel of common inbred strains reflects historical selection biases, and existing recombinant inbred panels have low allelic diversity. All such populations may be subject to consequences of inbreeding depression. The Collaborative Cross (CC) is a mouse reference population with high allelic diversity that is being constructed using a randomized breeding design that systematically outcrosses eight founder strains, followed by inbreeding to obtain new recombinant inbred strains. Five of the eight founders are common laboratory strains, and three are wild-derived. Since its inception, the partially inbred CC has been characterized for physiological, morphological, and behavioral traits. The construction of this population provided a unique opportunity to observe phenotypic variation as new allelic combinations arose through intercrossing and inbreeding to create new stable genetic combinations. Processes including inbreeding depression and its impact on allelic and phenotypic diversity were assessed. Phenotypic variation in the CC breeding population exceeds that of existing mouse genetic reference populations due to both high founder genetic diversity and novel epistatic combinations. However, some focal evidence of allele purging was detected including a suggestive QTL for litter size in a location of changing allele frequency. Despite these inescapable pressures, high diversity and precision for genetic mapping remain. These results demonstrate the potential of the CC population once completed and highlight implications for development of related populations.