Previous studies of the Sleeping Beauty (SB) transposon system, as an insertional mutagen in the germline of mice, have used reverse genetic approaches. These studies have led to its proposed use for regional saturation mutagenesis by taking a forward-genetic approach. Thus, we used the SB system to mutate a region of mouse Chromosome 11 in a forward-genetic screen for recessive lethal and viable phenotypes. This work represents the first reported use of an insertional mutagen in a phenotype-driven approach. The phenotype-driven approach was successful in both recovering visible and behavioral mutants, including dominant limb and recessive behavioral phenotypes, and allowing for the rapid identification of candidate gene disruptions. In addition, a high frequency of recessive lethal mutations arose as a result of genomic rearrangements near the site of transposition, resulting from transposon mobilization. The results suggest that the SB system could be used in a forward-genetic approach to recover interesting phenotypes, but that local chromosomal rearrangements should be anticipated in conjunction with single-copy, local transposon insertions in chromosomes. Additionally, these mice may serve as a model for chromosome rearrangements caused by transposable elements during the evolution of vertebrate genomes.