Transcriptional activation of the int-1 gene by proviral insertion mutations is thought to be a key step in mammary tumor induction by the mouse mammary tumor virus (MMTV). To test this hypothesis, we have constructed an int-1 allele resembling those found in virus-induced tumors, with an MMTV LTR placed 5' to the int-1 gene in the opposite transcriptional orientation. Transgenic mice harboring this allele express int-1 RNA at high levels in mammary and salivary glands of male and female mice and in male reproductive organs. The mammary glands of males and virgin females are grossly hyperplastic compared with those of nontrasgenic littermates. Mammary and (less frequently) salivary adenocarcinomas occur in these animals at rates indicating that transcriptional activation of int-1 and associated hyperplasia are initiating events in multistep carcinogenesis.