Familial hypobetalipoproteinemia is an autosomal codominant disorder resulting in a dramatic reduction in plasma concentrations of apolipoprotein (apo) B, cholesterol, and beta-migrating lipoproteins. A benefit of hypobetalipoproteinemia is that mildly affected individuals may be protected from coronary vascular disease. We have used gene targeting to generate mice with a modified Apob allele. Mice containing this allele display all of the hallmarks of human hypobetalipoproteinemia: they produce a truncated apoB protein, apoB70, and have markedly decreased plasma concentrations of apoB, beta-lipoproteins, and total cholesterol. In addition, the mice manifest several characteristics that are occasionally observed in human hypobetalipoproteinemia, including reduced plasma triglyceride concentrations, fasting chylomicronemia, and reduced high density lipoprotein cholesterol. An unexpected finding is that the modified Apob allele is strongly associated with exencephalus and hydrocephalus. These mice should help increase our understanding of hypobetalipoproteinemia, atherogenesis, and the etiology of exencephalus and hydrocephalus.