Autosomal dominant polycystic kidney disease (ADPKD) is a major cause of renal failure and is characterized by the formation of many fluid-filled cysts in the kidneys. It is a systemic disorder that is caused by mutations in PKD1 or PKD2. Homozygous inactivation of these genes at the cellular level, by a 'two-hit' mechanism, has been implicated in cyst formation but does not seem to be the sole mechanism for cystogenesis. We have generated a novel mouse model with a hypomorphic Pkd1 allele, Pkd1(nl), harbouring an intronic neomycin-selectable marker. This selection cassette causes aberrant splicing of intron 1, yielding only 13-20% normally spliced Pkd1 transcripts in the majority of homozygous Pkd1(nl) mice. Homozygous Pkd1(nl) mice are viable, showing bilaterally enlarged polycystic kidneys. This is in contrast to homozygous knock-out mice, which are embryonic lethal, and heterozygous knock-out mice that show only a very mild cystic phenotype. In addition, homozygous Pkd1(nl) mice showed dilatations of pancreatic and liver bile ducts, and the mice had cardiovascular abnormalities, pathogenic features similar to the human ADPKD phenotype. Removal of the neomycin selection-cassette restored the phenotype of wild-type mice. These results show that a reduced dosage of Pkd1 is sufficient to initiate cystogenesis and vascular defects and indicate that low Pkd1 gene expression levels can overcome the embryonic lethality seen in Pkd1 knock-out mice. We propose that in patients reduced PKD1 expression of the normal allele below a critical level, due to genetic, environmental or stochastic factors, may lead to cyst formation in the kidneys and other clinical features of ADPKD.