Two forms of the protozoan parasite Toxoplasma gondii are associated with intermediate hosts such as humans: rapidly growing tachyzoites are responsible for acute illness, whereas slowly dividing encysted bradyzoites can remain latent within the tissues for the life of the host. In order to identify genetic factors associated with parasite differentiation, we have used a strong bradyzoite-specific promoter (identified by promoter trapping) to drive the expression of T. gondii hypoxanthine-xanthine-guanine phosphoribosyltransferase (HXGPRT) in stable transgenic parasites, providing a stage-specific positive/negative selectable marker. Insertional mutagenesis has been carried out on this parental line, followed by bradyzoite induction in vitro and selection in 6-thioxanthine to identify misregulation mutants. Two different mutants fail to induce the HXGPRT gene efficiently during bradyzoite differentiation. These mutants are also defective in other aspects of differentiation: they replicate well under bradyzoite growth conditions, lysing the host cell monolayer as effectively as tachyzoites. Expression of the major bradyzoite antigen BAG1 is reduced, and staining with Dolichos biflorus lectin shows reduced cyst wall formation. Microarray hybridizations show that these mutants behave more like tachyzoites at a global level, even under bradyzoite differentiation conditions.