In an effort to create a conventional knockout mouse model for multiple endocrine neoplasia type 1 (MEN1), we targeted disruption of the mouse Men1 gene through homologous recombination in ES cells. Men1 exons 2-4 were replaced by a PGK-neomycin cassette inserted in the opposite direction of Men1 transcription (Men1(MSK/+)). Unexpectedly, the Men1 conventional knockout was lethal in heterozygous, chimeric animals. Analysis of embryos revealed late gestational lethality with some embryos showing omphalocele. This was a very surprising phenotype, given that humans and mice that are heterozygotes for loss of function mutations in MEN1 are phenotypically normal except for a risk of endocrine tumors. Northern analysis of Men1(MSK/+) embryonic stem cell RNA revealed the presence of an abundant, novel transcript of 2.1 kb, in addition to the expected wild-type transcripts of 2.7 kb and 3.1 kb. RT-PCR analysis identified this aberrant transcript as arising from the antisense strand of the PGK promoter. We hypothesize that this transcript is producing either a toxic effect at the RNA level, or a dominant negative effect through the production of an amino-terminal truncated protein product. This example serves as a cautionary reminder that mouse knockouts using PGK-neo may sometimes display phenotypes that reflect more than just the loss of function of the targeted gene.