We have previously described a strategy for integrating selectable marker genes into yeast artificial chromosomes (YACs) to facilitate their transfer into embryonic stem (ES) cells. Here we apply this technology to create mice carrying the core region of the human immunoglobulin (Ig) kappa light chain locus. A YAC was isolated which contains a 300 kb insert spanning three V kappa segments, the J kappa cluster, the C kappa region and extending downstream of the Kde element. After modification of this YAC to integrate the selectable neo marker gene, the YAC was introduced into ES cells by protoplast fusion. Several ES cell clones were obtained which appeared to harbor one complete copy of the YAC while retaining little or no other yeast DNA. The ES cells were injected into blastocysts and the chimaeric mice were shown to rearrange the introduced human light chain genes with the resultant production of antibodies containing human kappa light chains in the serum.