Transgenic mice are discussed which carry a rearrangement test transgene. The methylation status of the transgene varies, depending on the background mouse strain. When the transgene is bred into the C57BL/6 strain, it is completely methylated and not rearranged in lymphoid organs. After several generations of crossing into DBA/2 or SJL the transgene becomes unmethylated and rearranges at high frequency. A strain specific modifier of DNA methylation (Ssm-1) was mapped close to the Friend virus susceptibility locus (Fv-1) on mouse chromosome 4. Rearranged transgenes from spleen, bone marrow and thymus of adult mice or fetal liver were cloned and sequenced. A great variety of joints was found, with about 1/3 being in the correct reading frame. Small deletions into the V- and J-coding ends as well as N region additions contributed to the variability. The fetal joints showed no N regions. Since no functional immunoglobulin (Ig) gene can be created from this artificial test gene, the data indicate that the rearrangement mechanism of the fetus differs from that of the adult.