Despite extensive research on the molecular mechanisms of signal transduction by growth factors and their oncogenic receptor tyrosine kinases, the physiological relevance of these pathways, especially in mammals, remains largely unknown. A unique exception is the Steel factor (SLF) and its c-kit-encoded receptor, because many natural germ line mutations of both the ligand and the receptor exist in mice. The protooncogene c-kit encodes a cell surface receptor that belongs to the immunoglobulin gene family and carries an intrinsic tyrosine kinase activity in its cytoplasmic portion. The precursor of the Kit ligand, SLF, is also a transmembrane protein that exists as a soluble factor as well as a cell surface protein. The interaction of Kit with SLF leads to receptor dimerization, kinase activation, and tyrosine phosphorylation of cytoplasmic proteins that contain Src homology 2 motifs. Various mutations in Kit and SLF result in a defective signaling pathway and underly the complex phenotypes of W and Sl mice, respectively. The early development of at least four cell lineages is affected. These are erythrocytes, melanocytes, germ cells, and mast cells. Correlation between the behavior of these lineages and specific mutations uncovered interesting physiological aspects of the mechanism of signal transduction by a polypeptide growth factor. These include the different degrees of severity of affected lineages, indications for distinct functions during early embryonic development and at late phases, the significance of synergy between a growth factor and lymphokines, the interaction between mutant and wild-type proteins in heterozygous animals, and the possibility that a surface-anchored ligand may act differently than a soluble factor. Predictably, the lessons learned with Kit and Sl mice will be widely relevant to other pairs of ligands and receptors that control the function of different cell lineages and physiological processes.