Sleeping Beauty is a synthetic "cut-and-paste" transposon of the Tc1/mariner class. The Sleeping Beauty transposase (SB) was constructed on the basis of a consensus sequence obtained from an alignment of 12 remnant elements cloned from the genomes of eight different fish species. Transposition of Sleeping Beauty elements has been observed in cultured cells, hepatocytes of adult mice, one-cell mouse embryos, and the germline of mice. SB has potential as a random germline insertional mutagen useful for in vivo gene trapping in mice. Previous work in our lab has demonstrated transposition in the male germline of mice and transmission of novel inserted transposons in offspring. To determine sequence preferences and mutagenicity of SB-mediated transposition, we cloned and analyzed 44 gene-trap transposon insertion sites from a panel of 30 mice. The distribution and sequence content flanking these cloned insertion sites was compared to 44 mock insertion sites randomly selected from the genome. We find that germline SB transposon insertion sites are AT-rich and the sequence ANNTANNT is favored compared to other TA dinucleotides. Local transposition occurs with insertions closely linked to the donor site roughly one-third of the time. We find that approximately 27% of the transposon insertions are in transcription units. Finally, we characterize an embryonic lethal mutation caused by endogenous splicing disruption in mice carrying a particular intron-inserted gene-trap transposon.