The gene that is mutated in ataxia-telangiectasia (A-T), ATM, is catalytically activated in response to DNA damage. Yet a full accounting for the CNS deficits in human A-T or its mouse models remains elusive. We have analyzed the CNS phenotypes of two mouse Atm alleles--Atm(tm1Bal) (Bal) and Atm(tm1Awb) (Awb). Neither mutant has detectable mRNA or protein in peripheral tissues. In brain, although Bal/Bal mice have no ATM protein, they have nearly normal amounts of Atm mRNA. Bal/Bal neurons exhibit extensive cell cycle reentry and degeneration in both cortex and cerebellum. Unexpectedly, in Awb/Awb mice a novel mRNA is found in which the engineered mutation is excised. This mRNA is apparently translated and produces a catalytically active ATM protein that responds to DNA damage by phosphorylating p53 and Chk2. Prompted by these results, we examined eight cases of human A-T and found evidence for residual ATM protein in seven of them. These findings offer important new insights into the human disease and the role of brain ATM activity in the severity of the neurological symptoms of A-T.