We have used transgenic mouse technology to establish immortalized hepatoma cell lines stably secreting heterologous proteins, such as human alpha 1-antitrypsin and human factor IX. Hepatocyte-specific regulatory DNA sequences were used to target both the expression of an onc gene and the gene coding for the human protein to the liver of transgenic mice which eventually developed hepatocellular carcinomas. Tumour cells were subsequently established as permanent cell lines, which maintained a differentiated phenotype under specific culture conditions, being capable of producing biologically active and correctly processed human alpha 1-antitrypsin and factor IX. Moreover, a preliminary analysis has shown that certain cell lines express elevated total cytochrome P450 activity. These cells could therefore represent a useful alternative to the use of animals or primary cultures in drug safety testing.