Huntington's disease (HD) is a late-onset autosomal dominant neuropsychiatric disorder presenting in mid-adult life with personality disturbance and involuntary movements, cognitive and affective disturbance, and inexorable progression to death. The underlying genetic defect has been mapped to chromosomal band 4p16.3. Analysis of specific recombination events in some families with HD has further refined the location of the HD defect to a 2.2 megabase DNA interval. Using a direct complementary DNA selection strategy we have identified at least seven transcriptional units within the minimal region believed to contain the HD gene. Screening with one of the cDNA clones identified an Alu insertion in genomic DNA from two persons with HO which showed complete cosegregation with the disease in these families but was not found in 1,000 control chromosomes. Two genes including the previously identified $α$-adducin gene and another that encodes for a 12-kilobase transcript, map in close proximity to the Alu insertion site. The 12-kilobase transcript should be regarded as a strong caudidate for the HD gene.