To explore the physiological roles of transforming growth factor alpha (TGF alpha), we disrupted the mouse gene by homologous recombination in embryonic stem cells. Homozygous mutant mice were viable and fertile, but displayed pronounced waviness of the whiskers and fur, accompanied by abnormal curvature, disorientation, and misalignment of the hair follicles. Homozygous and, to a lesser extent, heterozygous mice displayed eye abnormalities of variable incidence and severity, including open eyelids at birth, reduced eyeball size, and superficial opacity. Histological examination revealed eyelid and anterior segment dysgenesis, corneal inflammation and scarring, and lens and retinal defects. Although TGF alpha deficiency affected skin and eyes, wound healing in these tissues was not impaired. Similar hair and eye defects have been previously associated with the recessive mutation waved-1 (wa-1), and Northern analysis revealed reduced expression of TGF alpha in wa-1 mice. Crosses between wa-1 homozygotes and TGF alpha-targeted mice confirmed that wa-1 and TGF alpha are allelic.