Mice homozygous for a disrupted transforming growth factor α (TGFα) gene are healthy and fertile, although some older mice show evidence of corneal inflammation. In contrast with TGFα +/- and +/+ animals, TGFα -/- mice have a pronounced waviness of the coat. Histological examination of the skin from TGFα -/- mice reveals a dramatic derangement of hair follicles. Mice with a disrupted TGFα gene also have curly whiskers, first evident on the day of birth. The phenotype of TGFα -/- mice is remarkably similar to that of the mouse mutant waved-1 (wa-1). Offspring resulting from crosses between TGFα -/- and wa-1 mice display the curly whisker-coat phenotype, indicating that the basis of the wa-1 phenotype is a mutation in the TGFα gene. These observations suggest that TGFα plays a pivotal role in determining skin architecture and in regulating hair development.