Recent studies have suggested that the retention of selectable marker cassettes (like PGK–Neo, in which a hybrid gene consisting of the phosphoglycerate kinase I promoter drives the neomycin phosphotransferase gene) in targeted loci can cause unexpected phenotypes in “knockout” mice due to disruption of expression of neighboring genes within a locus. We have studied targeted mutations in two multigene clusters, the granzyme B locus and the β-like globin gene cluster. The insertion of PGK–Neo into the granzyme B gene, the most 5′ gene in the granzyme B gene cluster, severely reduced the normal expression of multiple genes within the locus, even at distances greater than 100 kb from the mutation. Similarly, the insertion of a PGK–Neo cassette into the β-globin locus control region (LCR) abrogates the expression of multiple globin genes downstream from the cassette. In contrast, a targeted mutation of the promyelocyte-specific cathepsin G gene (which lies just 3′ to the granzyme genes in the same cluster) had minimal effects on upstream granzyme gene expression. Although the mechanism of these long distance effects are unknown, the expression of PGK–Neo can be “captured” by the regulatory domain into which it is inserted. These results suggest that the PGK–Neo cassette can interact productively with locus control regions and thereby disrupt normal interactions between local and long-distance regulatory regions within a tissue-specific domain.