Approximately 10% of newborns with congenital hypothyroidism are unable to convert iodide into organic iodine. This iodide organification defect has a prevalence of 1 in 40,000 newborns and may be caused by defects in the thyroid peroxidase enzyme (TPO), the hydrogen peroxide-generating system, the TPO substrate thyroglobulin, or inhibitors of TPO. We identified a high incidence of severe hypothyroidism due to a complete iodide organification defect in the youngest generation of five nuclear families belonging to an inbred Amish kindred. Genealogical records permitted us to trace their origin to an ancestral couple 7-8 generations back and to identify an autosomal recessive pattern of inheritance. Initial studies of homozygosity by descent using two polymorphic markers within the TPO gene showed no linkage to the phenotype. In fact, 4 of 15 affected siblings from 2 of the nuclear families were heterozygous, resulting in homozygosity values of 73% and 53% in affected and unaffected family members, respectively. A genome-wide homozygosity screen using DNA pools from affected and unaffected family members localized the defect to a locus close to the TPO gene. Linkage analysis using 4 additional polymorphic markers within the TPO gene reduced the number of homozygous unaffected siblings to zero without altering the percent homozygosity initially found in the affected. Sequencing of the TPO gene revealed 2 missense mutations, E799K and R648Q. TPO 779K was found in both alleles of the 11 affected homozygotes, both mutations were present in each of the 3 affected compound heterozygotes, and there were no TPO mutations in 1 subject with hypothyroidism of different etiology. These results demonstrate the power of the DNA pooling strategy in the localization of a defective gene and the pitfalls of linkage analysis when 2 relatively rare mutations coexist in an inbred population.