Recent studies have suggested that the retention of selectable marker cassettes (like PGK-Neo, in which a hybrid gene consisting of the phosphoglycerate kinase I promoter drives the neomycin phosphotransferase gene) in targeted loci can cause unexpected phenotypes in "knockout" mice due to disruption of expression of neighboring genes within a locus. We have studied targeted mutations in two multigene clusters, the granzyme B locus and the beta-like globin gene cluster. The insertion of PGK-Neo into the granzyme B gene, the most 5' gene in the granzyme B gene cluster, severely reduced the normal expression of multiple genes within the locus, even at distances greater than 100 kb from the mutation. Similarly, the insertion of a PGK-Neo cassette into the beta-globin locus control region (LCR) abrogates the expression of multiple globin genes downstream from the cassette. In contrast, a targeted mutation of the promyelocyte-specific cathepsin G gene (which lies just 3' to the granzyme genes in the same cluster) had minimal effects on upstream granzyme gene expression. Although the mechanism of these-long distance effects are unknown, the expression of PGK-Neo can be "captured" by the regulatory domain into which it is inserted. These results suggest that the PGK-Neo cassette can interact productively with locus control regions and thereby disrupt normal interactions between local and long-distance regulatory regions within a tissue-specific domain.