Mice carrying the piebald mutation exhibit white coat spotting due to the regional absence of neural crest-derived melanocytes. We previously reported that the piebald locus encodes the endothelin receptor type B gene, and that piebald mice express low levels of structurally intact endothelin receptor type B mRNA and protein. Here we report that both life-span of the endothelin receptor type B mRNA and promoter activity of the endothelin receptor type B gene are indistinguishable between wild-type and piebald mice. Introns 2-6 of the endothelin receptor type B gene in piebald mice were correctly excised with an efficiency indistinguishable from those of wild-type mice in exon trapping experiments. We found that the piebald allele of the endothelin receptor type B gene has a 5.5-kilobase retroposon-like element in intron 1 possessing canonical sequences of a polyadenylation signal and a splice acceptor site. Abnormal hybrid transcripts carrying exon 1 of the endothelin receptor type B gene and a portion of the 5.5-kilobase element are expressed in piebald mice. The insertion of the 5.5-kilobase element into a heterologous intron in a mammalian expression vector markedly reduced the expression of the reporter gene. Premature termination and aberrant splicing of the endothelin receptor type B transcript caused by the retroposon-like element in intron 1 lead to a reduced level of normal endothelin receptor type B transcript, which is responsible for the partial loss-of-function phenotype of piebald mice.