Transgenic mouse strains carrying proviruses were generated by exposing mouse embryos to a recombinant retrovirus. Animals carrying a single provirus were intercrossed to derive mice homozygous for a given proviral insertion. Adult mice homozygous for the Mpvl7 integration developed nephrotic syndrome and chronic renal failure. Histologically, affected kidneys showed progressive glomerular sclerosis. Similar lesions are seen in patients with progressive renal function deterioration. A probe to DNA sequences flanking the provirus detected a 1.7 kb RNA ubiquitously expressed during embryogenesis and in adults with high levels in kidney, brain, and heart. This RNA was not detected in tissues of homorygous animals, suggesting that the provirus interferes with RNA expression. Sequence analysis of the cDNA revealed that the gene encodes a 176 amino acid peptide containing hydrophobic regions, suggesting membrane association of the putative protein. The Mpvl7 mutant is a potentially useful experimental system for studying mechanisms leading to renal disorders in man.