Alagille syndrome (AGS) is an autosomal-dominant disorder characterized by intrahepatic cholestasis and abnormalities of heart, eye and vertebrae, as well as a characteristic facial appearance. Identification of rare AGS patients with cytogenetic deletions has allowed mapping of the gene of 20p12. We have generated a cloned contig of the critical region and used fluorescent in situ hybridization on cells from patients with submicroscopic deletions to narrow the candidate region to only 250 kb. Within this region we identified JAG1, the human homologue of rat Jagged1, which encodes a ligand for the Notch receptor. Cell-cell Jagged/Notch interactions are known to be critical for determination of cell fates in early development, making this an attractive candidate gene for a developmental disorder in humans. Determining the complete exon-intron structure of JAG1 allowed detailed mutational analysis of DNA samples from non-deletion AGS patients, revealing three frame-shift mutations, two splice donor mutations and one mutation abolishing RNA expression from the altered allele. We conclude that AGS is caused by haploinsufficiency of JAG1.