Transgenic mice overexpressing human transforming growth factor alpha (TGF-alpha) predictably develop an enlarged, firm pancreas. The present study investigated the changes that occur in the different components of the pancreas in these animals. The increase in size of the pancreas may be accounted for by increased connective tissue. The added collagen is mainly type I. Thin, elongate fibroblasts are frequently bordered by a basal lamina, a relationship that is normally restricted to the perineurium. Collagen is intimately associated with epithelial cells. Fingers of connective tissue extend close to acinar lumina. Redifferentiation of acinar cells produces tubular complexes. In some cases, acinar cells take on the appearance of ductular cells. In some, there is a transition to mucin-producing cells. Intermediate forms between acinar and mucin-producing cells are present. The growth factor is localized in acinar cells and decreases with redifferentiation. The pancreas of these animals routinely displays characteristics that also are observed in diseases of the exocrine pancreas in humans, including fibrosis and redifferentiation. It is likely that the changes are the result of both direct and indirect effects of TGF-alpha, some of which may parallel altered control mechanisms in human pancreatic disease. Study of this model may provide clues to understanding the initiation of fibrosis and redifferentiation in human pancreas.