Yeast artificial chromosome (YAC) transgenesis is associated with a high frequency of deletions in the integrated transgenes. To determine the impact of these rearrangements on the ability to derive structure-function relationships using YACs, transgenic mice were generated with 248 or 155 kb beta-globin locus YACs. The transgenics were examined for structural integrity of the YAC using an approach of structural analysis that unambiguously demonstrates intactness of YAC transgene copies. Globin gene expression per copy of each integrated transgene and the profiles of globin gene expression during development were determined. Diverse deletion patterns were observed in one or more integrated YACs in all the 248 and most of the 155 kb transgenic lines we analyzed. However, when the structure of the major regulatory element of the beta-globin locus, the locus control region, was preserved, the genes of the beta-globin locus functioned normally and globin transgenes of both the 248 and 155 kb beta-YACs were expressed in a position-independent, copy number-dependent manner. Furthermore, the globin genes of both beta-YACs displayed normal developmental regulation. We conclude that YACs can be used for analysis of structure-function relationships of large genes or multigene loci in spite of the tendency for rearrangements and deletions of the integrated transgenes. However, detailed structural evidence for integrity and continuity of locus sequences is required for correct interpretation of functional data.