Chromosomal deletions can uncover haploinsufficient or imprinted regions of the genome. Previously, the haploinsufficient locus t haplolethal 1 (Thl1) was identified and localized to a 1.3-Mb region using overlapping deletions around the Sod2 and D17Leh94 loci of the mouse t complex on Chr 17. Germline chimeric mice, produced from embryonic stem (ES) cells containing radiation-induced deletions of the Thl1 locus, never produced viable deletion-bearing progeny when mated to C57BL/6J (B6) females. However, deletion-bearing offspring could be obtained by mating to females of other strains. In this article we describe a transgenic approach to narrow the critical region for Thl1. BAC clones were introduced into a deletion-bearing ES cell line and one was shown to rescue the Thl1 phenotype, reducing the critical region to 140 kb. Analysis of the gene content of this region suggests two strong Thl1 candidates, Pdcd2 and a novel SET domain-containing gene termed Tset1. A more detailed analysis using mice carrying overlapping deletions identified subregions that influence the phenotypic characteristics of Thl1 hemizygotes.