When Lara Jo Regan, a photographer in Los Angeles, adopted the tiny, odd-looking stray she found five years ago, she thought he'd make a nice pet. Which is to say, she was thinking old school. But as she noticed the crowds of admirers he attracted, she began to ponder how his "nuclear cuteness" could be marketed on the Web. Now Regan has struck a deal that could make her a multimillionaire and Mr. Winkle -- already a multimedia star - into next Christmas's must-have toy. Here's how it happened.

Regan shot a Mr. Winkle calendar and started selling it in September -- along with Winkle's World videos, greeting cards and posters -- at www.mrwinkle.com. Soon after, Mr. Winkle appeared in newspapers and on TV, then on the ultimate launching pad for commercial cuteness, "The Rosie O'Donnell Show." The site got four million hits a month. By November, Regan had to turn her studio into "a fulfillment house" to handle all the orders.

Regan was invited to a meeting at Mattel, to which she brought Mr. Winkle (in a tote bag) and Vatel Vayness, a licensing agent. All agreed that Winkle was, as Regan puts it, "so otherworldly and so chameleon-like that he has a lot of potential as a character." They struck a merchandising deal, with Regan retaining absolute creative control because, as Vayness explains, only she knows "the soul of Mr. Winkle, what it is about him that elicits emotions from people." John Handy, the senior vice president of design at Mattel, won't go into specifics, but he will say that "usually Mattel doesn't really get interested in product lines that aren't $20 million or more. We obviously feel that his potential is much higher than that."

The first wave of Mr. Winkle merchandise -- including a full-size "feature plush" replica of him ($30) -- is due to hit the stores late this summer. Mattel is also planning to market Mr.Winkle collectibles, in various costumes, and jigsaw puzzles. And offers for more merchandise keep pouring in: children's books, greeting cards, trading cards, school supplies and kids' clothing that would most likely be way out of line with everything he stands for." For Regan, his charm is that he's "real and organic." "He restores people's faith in something essential, like, 'God, nature can produce amazing little creatures like this."' In this case, nature has created the perfect stuffed animal.