Mice lacking a functional Ren-1(d) gene exhibit a complete lack of renal juxtaglomerular cell granulation and atypical macula densa morphology. Transgenic mice carrying a 145-kilobase BAC clone encompassing the Ren-1(d) and Ren-2 loci were generated, characterized, and backcrossed with Ren-1(d-/-) mice. Homozygous Ren-1(d)-null mice expressing the BAC clone exhibited complete restoration of normal renal structure. Homologous recombination in Escherichia coil was used to generate a modified version of the BAC clone, in which an IRES beta -geo cassette was inserted specifically into the Ren-1(d) gene. When introduced into the germline, the modified clone provided a marker for juxtaglomerular cell differentiation and beta -geo was expressed appropriately in juxtaglomerular cells throughout development. Parallel backcross experiments onto the Ren-1(d)-null background demonstrated that the juxtaglomerular cells expressed the modified Ren-1(d) locus in the absence of regranulation. These data demonstrate that the nongranulated cells constitute bona fide juxtaglomerular cells despite their altered morphology, that overexpression of renin-2 cannot compensate for the loss of renin-1(d), and that primary structural differences between the two isoforms are responsible for the differences in granulation. The use of BAC modification as part of functional complementation studies illustrates the potential for in vivo molecular dissection of key physiological mechanisms.