The ability to generate mutations is a prerequisite to functional genetic analysis. Despite a long history of using the mouse as a model system for genetic analysis, a comprehensive collection for multiple alleles of most genes does not exist. The chemical mutagen of choice for the mouse has been N-ethyl-N-nitrosourea (ENU), an alkylating agent that mainly causes base substitutions in DNA and, therefore, allows for recovery of complete and partial loss, as well as gain of function alleles. Specific locus tests designed to detect recessive mutations showed that ENU is the most efficient mutagen in mouse with an approximate mutation rate of 1 mutation per 200 to 1000 gametes screened. In fact, several genome-wide and region-specific phenotype-based screens have been carried out with success. However, the anticipation of the completion of the human and mouse genome projects now emphasizes genotype-driven genetics--from sequence to mutations for understanding function. To take advantage of the mutagenicity of ENU and its ability to create allelic series of mutations, a complementary approach is described for generating mutations using mouse embryonic stem (ES) cells. A high mutation frequency can be achieved, and modulating DNA repair activities can enhance this frequency. The treated cells retain germ line competency, thereby rendering this approach applicable for efficient, high-throughput generation of allelic series of mutations pivotal for a fine-tuned dissection of biological pathways. The experiments outlined in this proposal take the next step toward genome wide application of this approach by applying this platform technology to production and analysis of phenotypes resulting from an allelic series of ENU-induced mutations in the Smad2 and Smad4 loci. In addition, a series of experiments are proposed to extend the technology toward whole animal phenotype-based screens using ES cells already compromised in the Tgfbeta signaling pathway. The ability to modulate and monitor the frequency and type of mutation produced, coupled with advancements in mutation detection, makes mutagenesis in ES cells a powerful addition to the existing strategies to deliver an expanded repertoire of mouse mutants.