After using a self-inactivating lentivirus for non-targeted insertional mutagenesis in mice, we identified a transgenic family with a recessive mutation that resulted in reduced fertility in homozygous transgenic mice. The lentiviral integration site was amplified by inverse PCR. Sequencing revealed that integration had occurred in intron 8 of the mouse Fance gene, which encodes the Fanconi anemia E (Fance) protein. Fanconi anemia (FA) proteins play pivotal roles in cellular responses to DNA damage and Fance acts as a molecular bridge between the FA core complex and Fancd2. To investigate the reduced fertility in the mutant males, we analyzed postnatal development of testicular germ cells. At one week after birth, most tubules in the mutant testes contained few or no germ cells. Over the next 2-3 weeks, germ cells accumulated in a limited number of tubules, so that some tubules contained germ cells around the full periphery of the tubule. Once sufficient numbers of germ cells had accumulated, they began to undergo the later stages of spermatogenesis. Immunoassays revealed that the Fancd2 protein accumulated around the periphery of the nucleus in normal developing spermatocytes, but we did not detect a similar localization of Fancd2 in the Fance mutant testes. Our assays indicate that although Fance mutant males are germ cell deficient at birth, the extant germ cells can proliferate and, if they reach a threshold density, can differentiate into mature sperm. Analogous to previous studies of FA genes in mice, our results show that the Fance protein plays an important, but not absolutely essential, role in the initial developmental expansion of the male germ line.