Non-agouti-lethal 18H (a18H) mice are dark agouti with black pinna hairs. What makes these mice unique is that they develop a spectrum of immunological diseases not seen in other agouti mutant mice. On the JU/Ct background, a18H mice develop an inflammatory disease of the large intestine. On the C57BL/6J background, they develop a fatal disease characterized by pulmonary chronic interstitial inflammation and alveolar proteinosis, inflammation of the glandular stomach and skin resulting in scarring due to constant itching, and hyperplasia of lymphoid cells, haematopoietic cells and the forestomach epithelium. Previous studies suggested that the a18H mutation results from a paracentric inversion that affects two loci: agouti and another, as yet unidentified locus designated itchy (the provisional gene symbol is Itch), that is responsible for the immunological phenotype of a18H mice. Here we confirm that a18H results from an inversion and show that Itch encodes a novel E3 ubiquitin protein ligase, a protein involved in ubiquitin-mediated protein degradation. Our results indicate that ubiquitin-dependent proteolysis is an important mediator of the immune response in vivo and provide evidence for Itch's role in inflammation and the regulation of epithelial and haematopoietic cell growth.