Autosomal recessive polycystic kidney disease (ARPKD) is characterized by the formation of large collecting tubule and ductular cysts that often result in renal insufficiency within the first decade of life. Understanding the process leading to cyst formation will require the identification and characterization of genes involved in the etiology of this disease. In this regard, we previously described the generation of a mouse model (TgN737Rpw) for ARPKD and the cloning of a candidate gene. Here we show direct involvement of the Tg737 gene in collecting duct cyst formation by expressing the wild-type Tg737 cDNA as a transgene in TgN737Rpw mutants. In contrast to TgN737Rpw mutants, the 'rescued' animals survive longer, have normal renal function and normal localization of the EGFr to the basolateral surfaces of collecting duct epithelium.