A transgenic mouse model for prostate and mammary cancer has been developed in mice containing a recombinant gene expressing the simian virus 40 early-region transforming sequences under the regulatory control of the rat prostatic steroid binding protein [C3(1)] gene. Male transgenic mice develop prostatic hyperplasia in early life that progresses to adenoma or adenocarcinoma in most animals surviving to longer than 7 months of age. Prostate cancer metastases to lung have been observed. Female animals from the same founder lines generally develop mammary hyperplasia by 3 months of age with subsequent development of mammary adenocarcinoma by 6 months of age in 100% of the animals. The development of tumors correlates with the expression of the transgene as determined by Northern blot and immunohistochemical analyses. The results of these experiments demonstrate that the C3(1) regulatory region used in these experiments is useful for targeting expression to the prostate and mammary gland. To our knowledge, this experimental system is the first reported transgenic mouse model for prostate cancer. These transgenic animals offer the opportunity to study hormone response elements in vivo and the multistage progression from normal tissue to carcinoma in the prostate and mammary glands.