We have examined transgene methylation in the DNA from the livers of a pedigree of mice carrying three copies of an integrated MToGH1 transgene. Utilizing the methylation-sensitive isoschizomers Msp I and Hpa II, Southern blot analysis revealed that all second generation animals derived from a transgenic female had hypermethylated DNA, whereas first generation animals sired by a transgenic male displayed a range of methylation phenotypes ranging from no methylation to hypermethylation of the transgene sequences. Of the mice that exhibited hypermethylation of the transgene in CpG dinucleotides (CmCGG), a minority of these animals also exhibited apparent CpC methylation (i.e. inhibition of Msp I cutting, presumably blocked by methylation of the outer C of CCGG). Methylation was also examined in the inner C of CC(A/T)GG sequences in the MToGH1 transgene using the isoschizomer pair BstN I and EcoR II. A minority of MToGH1 animals in the F1 generation showed clear evidence of methylation in these sites as well as in the inner and outer Cs of CCGG sites. An examination of MToGH1 expression in terms of oGH levels in serum revealed that there was a high degree of variation in the levels of circulating oGH between animals of this pedigree. There was a weak inverse relationship between the serum level of oGH and the extent of methylation of the transgene. In particular, mice exhibiting CpC together with CpG methylation were found to have very low levels of circulating oGH. Our results highlight the nature and complexity of epigenetic factors associated with transgene sequences which may ultimately influence expression of introduced genes in the mammalian genome.