The SV40(cT) mutant encodes a large tumor antigen (cT-ag) that is defective for transport from the cell cytoplasm into the nucleus. This mutant is able to transform established cell lines at near wild-type virus efficiencies, but has a markedly decreased ability to transform primary cells and to induce tumors in newborn hamsters (R. E. Lanford, C. Wong, and J. S. Butel, 1985, Mol. Cell. Biol. 5, 1043-1050). To explore the biology of transport-defective T-ag in vivo, transgenic mice carrying the cT-ag gene were produced. Five of eight founder animals died early in life of choroid plexus tumors (mean age +/- SE, 52 +/- 11.0 days); renal and thymic lesions were also observed. Mice of an SV40(cT) transgenic line regularly succumb to brain tumors (mean age, 81 +/- 1.2 days). SV40 T-ag is expressed in the tumor cells and is retained in the cytoplasm. The observation that SV40(cT) is equivalent to wild-type virus at tumor induction in transgenic mice emphasizes the probable importance of extranuclear forms of SV40 T-ag in brain tumor formation. This study also indicates that in vitro cell transformation assays may not always be accurate reflections of the oncogenic potential of a transforming gene in vivo, because of the different cell types involved.