A dwarf transgenic mouse (DTM) line has been established in which mice express relatively high levels of a mutated bovine (b) GH gene. This bGH analog binds to mouse liver membrane preparations with an affinity similar to that of wild-type bGH. The mean growth ratio of these mice is approximately 0.7 relative to that of their nontransgenic littermates. Serum insulin-like growth factor-I (IGF-I) levels of DTM were found to be approximately half those in nontransgenic littermates. Liver GH receptor levels were up-regulated in DTM or wild-type bGH transgenic mice. Pituitary GH levels were negatively correlated with serum IGF-I concentrations. Wild-type bGH transgenic mice contain relatively high serum IGF-I and low pituitary GH levels, whereas DTM possess low serum IGF-I and high pituitary GH levels. The decrease in serum IGF-I resulting from the interaction between the bGH analog, the endogenous mouse GH, and GH receptor(s) apparently leads to a dwarf phenotype. These data suggest that this bGH analog has uncoupled GH ligand-receptor binding from IGF-I production and acts as a functional antagonist to the action of endogenous mGH.