Smith–Magenis syndrome (SMS) is a multiple congenital anomaly/mental retardation syndrome associated with del(17)(p11.2p11.2). The phenotype is variable even in patients with deletions of the same size. RAI1 has been recently suggested as a major gene for majority of the SMS phenotypes, but its role in the full spectrum of the phenotype remains unclear. Df(11)17/+ mice contain a heterozygous deletion in the mouse region syntenic to the SMS common deletion, and exhibit craniofacial abnormalities, seizures and marked obesity, partially reproducing the SMS phenotype. To further study the genetic basis for the phenotype, we constructed three lines of mice with smaller deletions [Df(11)17-1, Df(11)17-2 and Df(11)17-3] using retrovirus-mediated chromosome engineering to create nested deletions. Both craniofacial abnormalities and obesity have been observed, but the penetrance of the craniofacial phenotype was markedly reduced when compared with Df(11)17/+ mice. Overt seizures were not observed. Phenotypic variation has been observed in mice with the same deletion size in the same and in different genetic backgrounds, which may reflect the variation documented in the patients. These results indicate that the smaller deletions contain the gene(s), most likely Rai1, causing craniofacial abnormalities and obesity. However, genes or regulatory elements in the larger deletion, which are not located in the smaller deletions, as well as genes located elsewhere, also influence penetrance and expressivity of the phenotype. Our mouse models refined the genomic region important for a portion of the SMS phenotype and provided a basis for further molecular analysis of genes associated with SMS.