Most magnocellular hypothalamic neurons synthesize the precursor for either vasopressin (AVP) or oxytocin (OT). The AVP precursor is cleaved to give AVP, AVP-associated neurophysin (AVP-NP) and a glycopeptide (GP), whereas the OT precursor gives OT and OT-NP. In Brattleboro rats a frame-shift mutation in the AVP-NP-encoding region of the gene prevents the secretion of AVP by the cells and, in most AVP neurons, AVP itself is virtually undetectable. A small number of magnocellular neurons in homozygous Brattleboro rats contain very large accumulations of peptide in distended saccules of rough endoplasmic reticulum (RER), and this peptide is immunoreactive for AVP and C-terminal OT-NP, but not for OT, AVP-NP or GP (Pow et al., 1992). We have now shown that this results from somatic non-homologous crossing over of the AVP and OT genes, resulting in the production of hybrid mRNA molecules with the 5'end of the AVP sequence and the 3' end of the OT sequence (AVP/OT transcripts). In most cases, the crossing over occurs within the highly homologous B exons (Mohr et al., 1994). In addition to the production of AVP/OT hybrid transcripts, polymerase chain reaction (PCR) amplification of mRNA from the hypothalami of homozygous rats also reveals OT/AVP hybrid transcripts, with 5' OT sequences and 3' AVP sequences. Furthermore, both types of hybrid transcript are not restricted to homozygous Brattleboro rats but can also be found in normal Long Evans animals. To date, we have not been able to locate cells in which the OT/AVP hybrids are produced; all the magnocellular neurons with hybrid peptide accumulations in the RER so far studied have been shown by immunocytochemistry to be of the AVP/OT type. In both normal and homozygous Brattleboro rats large accumulations of peptide do occur in the RER of OT-producing neurons but the peptide is immunoreactive for OT and OT-NP but not for AVP, AVP-NP or GP. Such cells increase in number 10-fold after injection of 20 micrograms estradiol daily for 7 days (Pow et al., 1991). Why this apparently normal gene product accumulates within the RER remains to be determined.