SV40 large T antigen (T-ag) is a potent oncogene able to transform many cell types. The human alpha-1-antitrypsin (AAT) gene encodes the major serine protease inhibitor in plasma. The 5’ flanking sequence of the AAT gene contains cis-acting elements that specify the expression of reporter genes in transgenic mice. Although the AAT gene is expressed primarily in the liver, it also is expressed in epithelial cells of the stomach, kidney, intestine and pancreas. A fusion gene with the 5’ flanking region of AAT driving the SV40 large T-ag gene was used to generate transgenic mice. Between 2 and 6 months of age, 6 of 7 founder mice developed hepatic neoplasms. Kidney hyperplasia (3/7) and carcinomas of the stomach (4/7) and pancreas (1/7) also were observed. Tumor cells in the different sites expressed T-ag that was detectable by immunohistochemical staining. A transgenic mouse line (1812) was established; liver tumors develop reproducibly in all offspring. Cellular changes progressing to liver tumor formation occur in discrete stages with predictable kinetics in animals of the 1812 line: (i) embryonal/fetal stage, no major histological changes; (ii) newborn to 2 weeks of age, hyperplastic livers with minor cellular changes; (iii) mice between 3 and 8 weeks of age, diffuse liver cell dysplasia without observable tumor nodules; (iv) mice 8 weeks of age and older, hepatocellular carcinomas and hepatoblastomas in a background of liver dysplasia. There was uniform expression of T-ag in the majority of hepatocytes in the first two stages, whereas the dysplastic stage was characterized by variation in both the intensity of staining and the proportion of positive cells. Most tumor nodules expressed high levels of T-ag, but occasional negative and very weakly staining nodules were observed. T-ag was found complexed with the cellular p53 protein in tumor cells. This transgenic mouse system provides a practical model for the molecular analysis of defined steps in hepatocarcinogene