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