We have reported production of transgenic mice containing human papillomavirus type 16 (HPV16) E6 and E7 oncogenes in which a characteristic testicular tumor develops at a very high incidence. Three transgenic mice transmitted the transgene to their siblings, in which the same type of tumor developed. In one line, named line 181, this testicular tumor developed in all the 93 males obtained for 10 generations. In most cases, this tumor was detectable bilaterally in the testes 9 to 10 months postdelivery. On cross-matings with other inbred strains, the HPV transgene was dominant in all the genetic backgrounds examined. In the condition of experimental cryptorchidism, obvious delay of tumor formation was observed. In these testes, the tumor cells were seen to arise from the interstitium. Moreover, this tumor also manifested obvious expression of gonadal specific 3 beta-hydroxysteroid dehydrogenase (3 beta-HSD) and other enzymes for androgen metabolism. These observations strongly suggest that this tumor has originated from Leydig cells. This transgenic mouse line, therefore, provides a novel system for investigating in vivo carcinogenesis and the mechanism of transformation of male gonadal cells.