To examine the function of murine beta-globin locus region (LCR) 5' hypersensitive site 3 (HS3) in its native chromosomal context, we deleted this site from the mouse germ line by using homologous recombination techniques. Previous experiments with human 5' HS3 in transgenic models suggested that this site independently contains at least 50% of total LCR activity and that it interacts preferentially with the human gamma-globin genes in embryonic erythroid cells. However, in this study, we demonstrate that deletion of murine 5' HS3 reduces expression of the linked embryonic epsilon y- and beta H 1-globin genes only minimally in yolk sac-derived erythroid cells and reduces output of the linked adult beta (beta major plus beta minor) globin genes by approximately 30% in adult erythrocytes. When the selectable marker PGK-neo cassette was left within the HS3 region of the LCR, a much more severe phenotype was observed at all developmental stages, suggesting that PGK-neo interferes with LCR activity when it is retained within the LCR. Collectively, these results suggest that murine 5' HS3 is not required for globin gene switching; importantly, however, it is required for approximately 30% of the total LCR activity associated with adult beta-globin gene expression in adult erythrocytes.