Mammalian genomes are in constant jeopardy of invasion by prokaryotic DNA sequences because of their extensive exposure to bacteria; however, mammalian genomes appear to be protected from horizontal transmission of bacterial DNA. Transgenic mice provide a convenient model system for investigating the capacity of mammalian genomes in vivo to retain, silence, and/or reject foreign DNAs. We have previously reported that bacterial genes encoding the Lac repressor (lacI) are subject to sequence-dependent methylation and silencing in the transgenic mouse. In this paper, we report that bacterially derived lacI transgenes, but not their mammalian counterparts, can also be eliminated from the somatic cell DNA of affected animals. This somatic instability is heritable, strain-dependent, and conferred in cis. Our data are consistent with a model of genome surveillance in the mouse which can lead to loss of foreign DNA and which may be analogous to restriction-modification systems that maintain the integrity of the bacterial genome.