Danforth's short tail mutant (Sd) mouse, first described in 1930, is a classic spontaneous mutant exhibiting defects of the axial skeleton, hindgut, and urogenital system. We used meiotic mapping in 1,497 segregants to localize the mutation to a 42.8-kb intergenic segment on chromosome 2. Resequencing of this region identified an 8.5-kb early retrotransposon (ETn) insertion within the highly conserved regulatory sequences upstream of Pancreas Specific Transcription Factor, 1a (Ptf1a). This mutation resulted in up to tenfold increased expression of Ptf1a as compared to wild-type embryos at E9.5 but no detectable changes in the expression levels of other neighboring genes. At E9.5, Sd mutants exhibit ectopic Ptf1a expression in embryonic progenitors of every organ that will manifest a developmental defect: the notochord, the hindgut, and the mesonephric ducts. Moreover, at E 8.5, Sd mutant mice exhibit ectopic Ptf1a expression in the lateral plate mesoderm, tail bud mesenchyme, and in the notochord, preceding the onset of visible defects such as notochord degeneration. The Sd heterozygote phenotype was not ameliorated by Ptf1a haploinsufficiency, further suggesting that the developmental defects result from ectopic expression of Ptf1a. These data identify disruption of the spatio-temporal pattern of Ptf1a expression as the unifying mechanism underlying the multiple congenital defects in Danforth's short tail mouse. This striking example of an enhancer mutation resulting in profound developmental defects suggests that disruption of conserved regulatory elements may also contribute to human malformation syndromes.