Congenital megacolon develops in transgenic mice that overexpress the homeobox-containing gene, Hoxa-4. The current study was done to identify abnormalities of the terminal colon that might account for the phenotype. The terminal bowel of transgenic mice was compared with that of control and lethal spotted (ls/ls) mice, a strain in which megacolon also develops. The terminal colon of the transgenic mice contained fewer ganglia than that of controls, but was hypoganglionic, rather than aganglionic like that of ls/ls mice. The neurons present in the adult transgenic colon were significantly increased in size and a subset of very large neurons (> 40 microns in maximum diameter) were observed. Electron microscopic studies of young adult transgenic mice revealed that the ganglia and nerves of the myenteric plexus had the ultrastructure of extraenteric peripheral nerve rather than that of the enteric nervous system (ENS). The myenteric ganglia in the transgenic animals contained Schwann cells associated with a basal lamina that enveloped axons completely and individually, instead of glia. Although collagen is excluded from the ganglia and thin nerve fibers of the normal ENS, a collagen-containing endoneurium surrounded each of the axon-Schwann cell units of the abnormal nerve fibers of the transgenic colon. Some of the neurons of the transgenic mice were located in these nerve bundles rather than in ganglia. There were also smooth muscle abnormalities in the terminal bowel of the transgenic mice. Wide gaps were present in the longitudinal muscle of the transgenic mice; these gaps contained ganglia that were in contact with the adventitia. These longitudinal smooth muscle cells were more irregular than those of controls and they contained fewer puncta adherens; moreover, a larger proportion of the volume of the cytoplasm of transgenic smooth muscle cells was occupied by organelles. Finally, an extensive thickening and reduplication of the basal lamina surrounding the smooth muscle cells of the muscularis mucosa was observed in the transgenic colon and resembled that found in ls/ls mice. These data suggest that both smooth muscle and the innervation of the terminal bowel of neonatal Hoxa-4 transgenic mice are structurally abnormal. Although some of the abnormalities seen in Hoxa-4 transgenic mice are similar to those which arise in ls/ls mice, the two conditions are not identical. In both animals, the data are consistent with the hypothesis that the defects arise as a result of a defective interaction between the precursors of enteric neurons and smooth muscle.