A loxP-transposon retrofitting strategy for generating large nested deletions from one end of the insert DNA in bacterial artificial chromosomes and P1 artificial chromosomes was described recently [Chatterjee, P. K. & Coren, J. S. (1997) Nucleic Acids Res. 25, 2205-2212]. In this report, we combine this procedure with direct sequencing of nested-deletion templates by using primers located in the transposon end to illustrate its value for position-specific single-nucleotide polymorphism (SNP) discovery from chosen regions of large insert clones. A simple ampicillin sensitivity screen was developed to facilitate identification and recovery of deletion clones free of transduced transposon plasmid. This directed approach requires minimal DNA sequencing, and no in vitro subclone library generation; positionally oriented SNPs are a consequence of the method. The procedure is used to discover new SNPs as well as physically map those identified from random subcloned libraries or sequence databases. The deletion templates, positioned SNPs, and markers are also used to orient large insert clones into a contig. The deletion clone can serve as a ready resource for future functional genomic studies because each carries a mammalian cell-specific antibiotic resistance gene from the transposon. Furthermore, the technique should be especially applicable to the analysis of genomes for which a full genome sequence or radiation hybrid cell lines are unavailable.