In Chlamydomonas reinhardtii, transforming DNA apparently integrates at random locations in the nuclear genome and generates a high number of mutants by gene inactivation. Twenty-four phoN mutants lacking the derepressible neutral (DN) phosphatase activity were isolated following transformation of the cw15arg7 strain with plasmid pASL harbouring the ARG7 gene encoding argininosuccinate lyase. In all mutants resulting from the transformation with linearised pASL, a functional ARG7 copy was found to be closely linked to a phoN mutation but additional ARG7 copies were present elsewhere in the genome. Of the 13 mutants submitted to allelism analysis, four were allelic or tightly linked to the previously isolated MNNG-induced phoN mutants (phoN2, phoN3, phoN24), the remaining mutants were distributed among seven additional loci. To learn more about the function of the genes involved in DN phosphatase production, we cloned PHON24 by plasmid rescue and screening of a wild-type genomic library. One clone complemented the phoN24 mutation in cotransformation experiments, as did several subcloned fragments. In all phoN24+ transformants, the DN phosphatase activity was 2-3 times lower than in the wild-type strain but about 10 times higher than in the untransformed control. In wild-type, PHON24 transcript accumulation was independent of inorganic phosphate deficiency. The transcripts were present in the MNNG-induced phoN24 mutant but were lacking in the two insertional phoN24 mutants. Insertional mutagenesis has thus permitted the isolation of novel mutants which were missing after induction with a chemical mutagen and the cloning of a gene which is probably involved in the regulation of the DN phosphatase.