Maize transposable elements, when inserted in or near genes, alter expression by several transcriptional and posttranscriptional mechanisms. Three independent, unstable insertions of the transposable element Mutator (Mu) into the first intron of the Alcohol dehydfogenase-7 (Adhl) gene have been shown to decrease expression [Strommer et al. (1982). Nature 300,542-5441. We have developed an approach to elucidate the underlying molecular mechanisms responsible for the mutant phenotypes. Mul elements were inserted into Adhl-S intron 1 in vitro to create plasmid facsimiles of the mutant alleles. The Mul element was also inserted at nove1 positions within intron 1 to create new mutations. The Mul/intron constructions were placed between the Adhl-S promoter/exon 1 segment and a reporter gene (firefly luciferase or 8-glucuronidase), and these chimeric gene constructs were tested in transient assays in maize protoplasts. When compared with the appropriate control, the Mul insertions decreased reporter gene expression to levels approximating the alcohol dehydrogenase enzyme activities observed for the Adhl-S mutants in vivo. The Mul insertions also showed a polarity effect with luciferase expression increasing as the insertions were placed nearer the 3' splice junction. In addition, Mul insertions within a different intron, actin intron 3, also significantly reduced luciferase expression, indicating that Mul insertions within introns are likely to diminish expression in many genes. The presence of the Mul sequences was correlated with decreased levels of steadystate luciferase transcript. Deletion analysis of the Mul element and RNase mapping indicate that the transposable element contains RNA processing signals in its central region that are largely responsible for the decrease in expression.