Loss of heterozygosity (LOH) is a molecular phenomenon that denotes the loss of one of the two alleles at a specific locus. It is frequently associated with tumour suppressor genes in various cancers and also with hyperproliferative disorders, although not exclusively. Interestingly, in conditions where there is an inherited germline mutation, the lost allele is always the functional one, thereby rendering a phenotypically dominant disease of recessive character at the cellular level. A disease more recently shown to be associated with LOH is polycystic kidney disease type 1, a systemic disorder characterized by significant pleiotropy. The main pathology is from renal cyst formation that eventually leads to end-stage renal failure during adult life. We describe the identification of a missense mutation in the repeated part of the PKD1 gene, exon 31, that substitutes valine for methionine. The mutation, M3375V, cosegregates with the disease phenotype in a large Cypriot family. During transplantation of one patient, one of the polycystic kidneys was removed and DNA was isolated from cystic epithelial cells. In 3 of 17 cysts examined with intragenic and flanking polymorphic markers on chromosome 16 we detected LOH, since the wild-type allele was lost, thereby rendering the affected kidneys of mosaic character. The degree of LOH was extensive and varied among the three cysts, supporting the multiplicity of expression of the phenomenon on different occasions. No LOH was detected for other selected loci examined. Our work further supports the hypothesis that the rate-limiting step in cyst formation may be the occurrence of a second somatic hit, although other factors may be also involved. The high frequency of mutations at this locus may, to a great extent, explain the variability in phenotype observed among patients in the same families, and the relatively high frequency of the disease worldwide.