Eighteen overlapping cosmid clones spanning 240 kilobases and encoding the gene for factor B and two genes related to the fourth component of complement (C4) were isolated from a murine H-2d genomic library. Cosmid clones were identified by hybridization to human cDNA probes for factor B and C4 and were linked by chromosomal walking procedures. The cluster of clones contains two regions with sequences homologous to the C4 cDNA probe, both in the same orientation, representing a direct duplication of at least 55 kilobases of chromosomal DNA, separated by a shorter (less than 25 kilobases) segment of nonduplicated DNA. Restriction fragment-length polymorphism seen by using C4 probes maps these sequences to the S region of the major histocompatibility complex. 5' to the two C4-like sequences is an approximately equal to 40-kilobase-long region of chromosomal DNA remarkable for its lack of restriction fragment-length polymorphism, containing sequences homologous to the human factor B cDNA probe. These experiments demonstrate that the structural gene for factor B is located in the S region of the murine major histocompatibility complex and that this region contains an extensive direct duplication that contains the structural gene for mouse C4 and, we presume, for the sex-limited protein variant, Slp. RNA transfer blot analysis of total liver RNA from high C4- and low C4-producing strains showed that steady-state levels of C4-hybridizing RNA were much greater in high C4-producing strains. Regulation of circulating C4 levels in high C4 and low C4 strains is at least partly at the level of mRNA transcription, processing, or degradation.