The agouti locus on mouse chromosome 2 encodes a secreted cysteine-rich protein of 131 amino acids that acts as a molecular switch to instruct the melanocyte to make either yellow pigment (phaeomelanin) or black pigment (eumelanin). Mutations that up-regulate agouti expression are dominant to those causing decreased expression and result in yellow coat color. Other associated effects are obesity, diabetes, and increased susceptibility to tumors. To try to define important functional domains of the agouti protein, we have analyzed the molecular defects present in a series of recessive viable agouti mutations. In total, six alleles (amJ, au, ada, a16H, a18H, ae) were examined at both the RNA and DNA level. Two of the alleles, a16H and ae, result from mutations in the agouti coding region. Four alleles (amJ, au, a18H, and ada) appear to represent regulatory mutations that down-regulate agouti expression. Interestingly, one of these mutations, a18H, also appears to cause an immunological defect in the homozygous condition. This immunological defect is somewhat analogous to that observed in motheaten (me) mutant mice. Short and long-range restriction enzyme analyses of homozygous a18H DNA are consistent with the hypothesis that a18H results from a paracentric inversion where one end of the inversion maps in the 5' regulatory region of agouti and the other end in or near a gene that is required for normal immunological function. Cloning the breakpoints of this putative inversion should allow us to identify the gene that confers this interesting immunological disorder.