The beta-amyloid precursor protein (beta APP) gene of the mouse was disrupted by inserting into exon 2 a cassette containing a neomycin resistance gene and a putative transcription termination sequence. Contrary to expectation, brain and other tissues from mice homozygous for the insertion still contained beta APP-specific RNA, albeit at a level 5- to 10-fold lower than wild type and lacking the disrupted exon, which had been spliced out. The brain contained shortened beta APP-specific protein at a low level. Mutant mice were severely impaired in spatial learning and exploratory behavior and showed increased incidence of agenesis of the corpus callosum.