The strain-specific modifier Ssm1 is responsible for the strain-dependent methylation of particular E. coli gpt-containing transgenic sequences. Here, we identify Ssm1 as the KRAB-zinc finger (ZF) gene 2610305D13Rik located on distal chromosome 4. Ssm1b is a member of a gene family with an unusual array of three ZFs. Ssm1 family members in C57BL/6 (B6) and DBA/2 (D2) mice have various amino acid changes in their ZF domain and in the linker between the KRAB and ZF domains. Ssm1b is expressed up to E8.5; its target transgene gains partial methylation by this stage as well. At E9.5, Ssm1b mRNA is no longer expressed but by then its target has become completely methylated. By contrast, in D2 embryos the transgene is essentially unmethylated. Methylation during B6 embryonic development depends on Dnmt3b but not Mecp2. In differentiating B6 embryonic stem cells methylation spreads from gpt to a co-integrated neo gene that has a similarly high CpG content as gpt, but neo alone is not methylated. In adult B6 mice, Ssm1b is expressed in ovaries, but in other organs only other members of the Ssm1 family are expressed. Interestingly, the transgene becomes methylated when crossed into some, but not other, wild mice that were kept outbred in the laboratory. Thus, polymorphisms for the methylation patterns seen among laboratory inbred strains are also found in a free-living population. This may imply that mice that do not have the Ssm1b gene may use another member of the Ssm1 family to control the potentially harmful expression of certain endogenous or exogenous genes. © 2014. Published by The Company of Biologists Ltd.