We have developed a method for the introduction of yeast artificial chromosomes (YACs) into transgenic mice. An 85 kilobase (kb) fragment of the human heavy chain immunoglobulin gene was cloned as a YAC, and embryonic stem cell lines carrying intact, integrated YACs were derived by co-lipofection of the YAC with an unlinked selectable marker. Chimaeric founder animals were produced by blastocyst injection, and offspring transgenic for the YAC were obtained. Analysis of serum from these offspring for human heavy chain antibody subunits demonstrated expression of the YAC-borne immunoglobulin gene fragment. Co-lipofection may prove to be a highly-successful means of producing transgenic mice containing large gene fragments in YACs.