Mammary explants and epithelial cell cultures from transgenic mice carrying the human serum albumin (HSA) gene or minigenes behind the regulatory sequences of the ovine beta-lactoglobulin gene were analyzed. Previously we demonstrated that mammary explants from virgin female transgenic mice synthesize and secrete high levels of HSA during the first day in culture. Here we present a detailed analysis of endogenous and transgene expression during the first 20 h of mammary explant cultures. We show that HSA genes as well as endogenous milk protein genes are rapidly induced upon explantation. Unexpectedly, HSA was synthesized also in mammary explants from strains that do not secrete HSA into the milk, indicating the existence of a cryptic potential to express the transgene. Histological examination revealed that some luminal epithelial cells detached from the underlying extracellular matrix (ECM) soon after explantation. Epithelial cell cultures from nonsecreting strains grown on plastic rapidly induced transgene expression and secreted higher levels of HSA into the medium compared to cells grown on collagen. These results suggest that tissue organization and most likely the interaction of epithelial cells with the ECM are intimately involved in the control of HSA transgene expression.