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Background: N-ethyl-N-nitrosourea (ENU)-induced mutagenesis is a powerful tool for the study of gene function and the generation of human disease models. A large number of mouse mutants obtained by ENU-induced mutagenesis with a variety of phenotypes have been recovered. However, after genetic confirmation testing, only approximately 50% of the abnormal phenotypes were found to be heritable., Methodology/principal Findings: A mouse mutant, Dp1, with a dilated pupil phenotype was induced with an N-ethyl-N-nitrosourea (ENU) mutagenesis strategy. Sequence analysis for Nrg1 reveals a G>A base substitution that flanks exon E59, encoding for an EGFβ domain, in the 5' splice donor site. The mutation affects but does not abolish the splicing of EGFβ-type Nrg1 mRNA in Dp1 mice and produces several different transcripts by activating other, cryptic splice sites. These types of protein isoforms are expected, and the result shows that, in the mutant, the effect is a decrease in but not an elimination of the high affinity EGFβ-type Nrg1 isoforms. This is partially compensated for by an increase in expression of the low affinity alpha forms or inactive proteins, suggesting that the mutation results in a hypomorphic allele. Interestingly, genetic model testing shows that Dp1 is a mutation that results in a dilated pupil phenotype that is inherited with very low penetrance when heterozygous and with complete penetrance when homozygous. Pharmacological and immunohistochemical tests show a reduction of muscarinic (M) receptors in the sphincter pupillae of Dp1 mice, which is a major cause of dilated pupils., Conclusions/significance: This study is the first report of an Nrg1 mutation being associated with a dilated pupil phenotype and the reduction of M receptors. This report may help in establishing more mutant mouse lines and models of human genetic disease and can be applied to other organisms. Dp1 mice are a valuable resource for the further clarification of Nrg1 biological function.