The MRL/MpJ-Fas(lpr) (MRL-lpr/lpr) mouse spontaneously develops a generalized autoimmune disease with features similar to those of systemic lupus erythematosus. This mouse strain provides a valuable system for identifying and characterizing the multiple genetic factors that influence the pathogenesis of autoimmune diseases. One of the most powerful means of examining the role of a specific gene product in vivo is by inactivating the gene in mouse embryonic stem (ES) cells by homologous recombination and using these cells to derive mouse lines carrying the inactivated gene. The successful application of this approach, however, requires an ES cell line that will remain stable in culture during the processes of genetic manipulation and selection. To date, ES cell lines that meet this criterion have been derived from only a few mouse strains. Here we describe the production and characterization of stable ES cell lines from the MRL mouse strain. Approximately 7% of the blastocysts derived from the MRL/MpJ+ (MRL-+/+) strain gave rise to ES cell lines, and both of the male MRL-+/+ ES cell lines tested were shown to be germline competent. We show that the MRL-+/+ ES cell lines undergo gene targeting by homologous recombination at high frequency by inactivating the gene encoding the EP2 prostaglandin receptor. These Ep2-targeted MRL ES cell lines were used to generate MRL mouse lines heterozygous for the disrupted Ep2 gene, thus demonstrating the feasibility of using a genetic approach to dissect the pathobiology of the autoimmune disease in the MRL mouse.