The mouse cpk mutation is the most extensively characterized murine model of polycystic kidney disease (PKD) and closely resembles human autosomal recessive PKD (ARPKD), with the exception that B6-cpk/cpk homozygotes do not express the biliary ductal plate malformation (DPM) lesion. However, homozygous mutants from outcrosses to other strains, e.g. DBA/2J (D2), CD-1, BALB/c and Mus mus castaneus (CAST), express the DPM. The current study was designed: (i) to characterize the cpk-associated biliary disease in affected F₂ homozygotes from intercrosses with either CAST or D2; and (ii) to evaluate focal biliary cysts identified in heterozygotes from a D2-cpk congenic strain. We found that all F₂cpk/cpk pups expressed both the typical renal cystic disease and the DPM. The DPM severity, assessed using semi-quantitative histopathological analysis, was markedly variable in these F₂ progeny. We found no correlation between the severity of the DPM and the renal cystic disease in either F₂ cohort. In addition, we identified focal cysts, apparently of biliary origin, in the livers of both aged D2-+/cpk and F₁ heterozygotes. Genetic analysis demonstrated loss of heterozygosity at the cpk interval and supports a loss-of-function model for biliary cysts. We conclude that the cpk allele contains an inactivating mutation which disrupts tubulo-epithelial differentiation in the kidney and biliary tract. Expression of the biliary lesion is modulated by genetic background, and the specific biliary phenotype is determined by whether loss of function of the cpk gene occurs as a germline or a somatic event.