Transgenic mice offer a powerful model system for studying the molecular mechanisms of gene regulation during development. Previously reported results with the transgenic model system have shown that the different transgenes can be regulated and expressed appropriately. In an in vitro system using NIH3T3 cells, we have shown that the ets-2 gene has mitogenic and transforming activity. To study the role of the ets gene family in normal developmental processes and tumorigenesis in vivo, we have generated transgenic mice with the ets-2 proto-oncogene linked to a heterologous promoter. The transgenic mice were generated by microinjection of ets-2 cDNA linked to the mouse metallothionein promoter into the pronuclei of one cell embryo. The injected embryo was implanted into the oviduct of pseudopregnant mothers and brought to term. One of the 32 pups was shown to contain the ets transgene by Southern blot analysis of the DNA prepared from the tails. The founder mouse (female) was bred again to produce offspring that contain the ets-2 transgene. The ets-2 heterozygous mice were inbred to produce homozygous mice. The ets-2 homozygous mice appear to develop hydrocephalus and die within two weeks of birth.