The murine alloantigen, Ly‐6C, is found on 45% of bone marrow cells, 25% of splenocytes and 15% of lymph node cells in all inbred strains of mice tested, with the exception of NOD, NZB and ST. In these three strains, Ly‐6C expression can be detected on only 5% of bone marrow cells and not at all on cells from spleen or lymph node. NOD and NZB, which are models for the autoimmune diseases, diabetes and lupus, respectively, also exhibit a depressed syngeneic mixed lymphocyte reaction. Southern blot analysis reveals a restriction fragment length polymorphism involving the Ly‐6C gene which is unique to these three strains. Cloning of the affected genomic segment from the NOD mouse indicates the presence of an interruption in the flanking region of the Ly‐6C gene at a point 475 bp upstream of the transcription initiation site and the consequent separation of distal 5′ sequences from the body of the gene by at least 10 kb. Inspection of the recombination borders reveals a set of inverted copies of a mouse repetitive R element. Transfection of the Ly‐6C genes from NOD and BALB/c into a murine carcinoma line indicates relative functional impairment of the NOD gene, thus paralleling performance in vivo.