Targeting of genes in mice, a key approach to study development and disease, often leaves a neo cassette, loxP, or FRT sites inserted in the mouse genome. Insertion of neo can influence the expression of neighboring genes, but similar effects have not been reported for loxP sites. We therefore performed microarray analyses of mice in which the Ncam or the Tnr gene were targeted either by insertion of neo or loxP/FRT sites. In the case of Ncam, neo, but not loxP/FRT insertion, led to a 2-fold reduction in mRNA levels of 3 genes located at distances between 0.2 and 3.1 Mb from the target. In contrast, after introduction of loxP/FRT sites into introns of Tnr, we observed a 2.5- to 4-fold reduction in the transcript level of the Gas5 gene, 1.1 Mb away from Tnr, most probably due to disruption of a conserved regulatory element in Tnr. Insertion of short DNA sequences such as loxP/FRT can thus influence off-target mRNA levels if these sites are accidentally placed into regulatory elements. Our results imply that conditional knockout mice should be analyzed for genomic positional side effects that may influence the animals' phenotypes.