The anatomical complexity of the mammalian central nervous system (CNS) presents special problems for the analysis of CNS gene expression and function. The most difficult challenge is presented by the simple fact that there are hundreds of functionally and morphologically defined cell types in the CNS. Given this complexity, the interpretation of CNS phenotypes is often problematic. The preparation of transgenic mice carrying marked bacterial artificial chromosomes (BACs) provides an important avenue for improving our understanding of CNS-expressed genes and phenotypes. This approach can allow efficient analysis of patterns of gene expression, subcellular localization of their encoded products and neuronal projection patterns. BAC transgenic mice can also provide access to information relevant to gene function based on phenotypes arising from increased gene dosage or expression of activating and dominant-negative alleles. This review will concentrate on these issues and their relevance to the analysis of CNS-expressed genes.