Autosomal recessive polycystic kidney disease (ARPKD) is caused by mutations in the polycystic kidney and hepatic disease (PKHD1) gene encoding the protein fibrocystin/polyductin. The aim of our study was to produce a mouse model of ARPKD in which there was no functional fibrocystin/polyductin to study the pathophysiology of cystic and fibrocystic disease in renal and non-renal tissues. Exon 2 of the gene was deleted and replaced with a neomycin resistance cassette flanked by loxP sites, which could be subsequently removed by Cre-lox recombinase. Homozygous Pkhd1^del2/del2 mice were viable, fertile and exhibited hepatic, pancreatic, and renal abnormalities. The biliary phenotype displayed progressive bile duct dilatation, resulting in grossly cystic and fibrotic livers in all animals. The primary cilia in the bile ducts of these mutant mice had structural abnormalities and were significantly shorter than those of wild-type (WT) animals. The Pkhd1^del2/del2 mice often developed pancreatic cysts and some exhibited gross pancreatic enlargement. In the kidneys of affected female mice, there was tubular dilatation of the S3 segment of the proximal tubule (PT) starting at about 9 months of age, whereas male mice had normal kidneys up to 18 months of age. Inbreeding the mutation onto BALBc/J or C57BL/6J background mice resulted in females developing PT dilatation by 3 months of age. These inbred mice will be useful resources for studying the mechanisms underlying the pathogenesis of ARPKD.