Transgenic mice were generated which express a truncated nuclear retinoic acid receptor beta (RAR beta), closely resembling the natural isoform RAR beta 4, under the control of the MMTV promoter. The transgene was expressed in salivary gland, testis, lung and mammary tissue in two different lines. At approximately 11-14 months virtually all the transgenic mice showed hyperplasia of the lung alveolar epithelium with an excess of type II pneumocytes. Hyperplasia of the mammary alveoli and terminal ducts was also seen in some females. Salivary glands and some sebaceous glands were hyperplastic in most male transgenic mice, but only rarely in females or in non-transgenics. Primary benign and malignant tumours were more numerous in transgenic mice than in controls, with a total of 23 in 43 mice versus two in 33 non-transgenic animals. Treatment with dexamethasone to increase transgene expression resulted in exaggerated versions of the above phenotypes. Overexpression of RAR beta 4 therefore appears to predispose various tissues to hyperplasia and neoplasia, and this by contrast to the RAR beta 2 isoform, which has tumour suppressor activity. A survey of ratios of RAR beta 4:RAR beta 2 expression in human lung tumour cell lines showed an increase compared with normal lung tissue, suggesting that RAR beta 4 may play a similar role in human tumorigenesis.