An unusual non-defective mutant of polyoma virus with an anomalously large genome, designated din-21, has been isolated. The viral chromosome lacks 49 base pairs of the putative control region between the origin of replication and the initiation codon for the early proteins, the T-antigens. In their stead , 95 base pairs, with limited homology to the deleted sequence and apparently of mouse origin, have been inserted. The primary sequence of the insert DNA has been determined and some of the biological properties of the mutant examined. It transforms rat-1 cells slightly better than wild-type virus and grows slightly less well in lytically infected mouse cells. It does not interfere with the growth of wild-type polyoma virus. The properties of this mutant suggest that it is a natural isolate of mouse cells. The mutant was presumably generated by reciprocal recombination between polyoma DNA and mouse host DNA. This could be associated with the integration of a viral DNA sequence into the host chromosome during the viral replicative cycle.