We have generated transgenic mice by microinjection of a 39-kb mouse pro alpha 1(II) collagen gene construct containing a deletion of exon 7 and intron 7. This mutation was expected to disturb the assembly and processing of the homotrimeric type II collagen molecule in cartilage. Expression of transgene mRNA at levels equivalent or higher than the endogenous mRNA in the offspring of two founder animals resulted in a severe chondrodysplastic phenotype with short limbs, hypoplastic thorax, abnormal craniofacial development, and other skeletal deformities. The affected pups died at birth due to respiratory distress. Light microscopy of epiphyseal growth plates of transgenic pups demonstrated a marked reduction in cartilaginous extracellular matrix and disruption of the normal organization of the growth plate. The zone of proliferating chondrocytes was greatly reduced whereas the zone of hypertrophic chondrocytes was markedly increased extending deep into the diaphysis suggestive of a defect in endochondral ossification. Electron microscopic examination revealed chondrocytes with extended RER, a very severe reduction in the amount of cartilage collagen fibrils, and abnormalities in their structure. We postulate that the deletion in the alpha 1(II) collagen acts as a dominant negative mutation disrupting the assembly and secretion of type II collagen molecules. The consequences of the mutation include interference with normal endochondral ossification. These mice constitute a valuable model to study the mechanisms underlying human chondrodysplasias and normal bone formation.