The JAX Diversity Outbred population is a new mouse resource derived from partially inbred Collaborative Cross strains and maintained by randomized outcrossing. As such, it segregates the same allelic variants as the Collaborative Cross but embeds these in a distinct population architecture in which each animal has a high degree of heterozygosity and carries a unique combination of alleles. Phenotypic diversity is striking and often divergent from phenotypes seen in the founder strains of the Collaborative Cross. Allele frequencies and recombination density in early generations of Diversity Outbred mice are consistent with expectations based on simulations of the mating design. We describe analytical methods for genetic mapping using this resource and demonstrate the power and high mapping resolution achieved with this population by mapping a serum cholesterol trait to a 2-Mb region on chromosome 3 containing only 11 genes. Analysis of the estimated allele effects in conjunction with complete genome sequence data of the founder strains reduced the pool of candidate polymorphisms to seven SNPs, five of which are located in an intergenic region upstream of the Foxo1 gene.