Nance-Horan syndrome (NHS) is an X-linked disorder characterized by congenital cataracts, dental anomalies, dysmorphic features and mental retardation. A recent report suggests that the novel gene NHS1 is involved in this disorder due to the presence of point mutations in NHS patients. A possible mouse model for NHS, Xcat, was mapped to a 2.11 Mb interval on the X-chromosome. Sequence and FISH analysis of the X-chromosome region containing the Xcat mutation reveal a large insertion between exons 1 and 2 of the mouse Nhs1 gene. The insertion inhibits the expression of the Nhs1 isoform containing exon 1 and results in exclusive expression of the alternative isoform containing exon 1A. Quantitative RT-PCR of Xcat cDNA shows reduced levels of Nhs1 transcripts. The Nhs1 protein is strongly expressed within the cytoplasm of elongating lens fiber cells from wild-type neonate lens, but is significantly reduced within the Xcat lens. Transient transfection studies of CHO cells with Nhs1-GFP fusion proteins were done to determine whether the amino acids encoded by exon 1 were critical for protein localization. We found the presence of Nhs1 exon 1 critical for localization of the fusion protein to the cytoplasm, whereas fusion proteins lacking Nhs1 exon 1 are predominantly nuclear. These results indicate that the first exon of Nhs1 contains crucial information required for the proper expression and localization of Nhs1 protein. Inhibition of expression of the exon 1 containing isoform results in the abnormal phenotype of Xcat.