Sequences proximal to transgene integration sites are able to deregulate transgene expression resulting in complex position effect phenotypes. In addition, transgenes integrated as repeated arrays are susceptible to repeat-induced gene silencing. Using a Cre recombinase-based system we have addressed the influence of transgene copy number (CN) on expression of hCD2 transgenes. CN reduction resulted in a decrease, increase or no effect on variegation depending upon the site of integration. This finding argues that repeat-induced gene silencing is not the principle cause of hCD2 transgene variegation. These results also suggest that having more transgene copies can be beneficial at some integration sites. The transgenic lines examined in this report also exhibited a form of imprinting, which was manifested by decreased levels of expression and increased levels of variegation, upon maternal transmission; and this correlated with DNA hypermethylation and a reduction in epigenetic chromatin modifications normally associated with active genes.