Classical approaches for producing transgenic livestock require labor-intensive, time-consuming, and expensive methods with low efficiency of transgenic production. A promising approach for producing transgenic animals by using male stem cells was recently reported by Brinster and Zimmermann (1994; Proc Natl Acad Sci 91:11298-11302) and by Brinster and Avarbock (1994: Proc Natl Acad Sci USA 91:11303-11307). However, in order to apply this technique to producing transgenic animals, some difficulties have to be overcome. These include a satisfactory method for short-term in vitro culture for drug selection after transfection with exogenous DNA, and methods for the use of livestock such as pigs. We developed a new method for transferring foreign DNA into male germ cells. Mice and pigs were treated with busulfan, an alkylating agent, to destroy the developing male germ cells, and liposome/bacterial LacZ gene complexes were introduced into each seminiferous tubule by using a microinjection needle. As a control, lipofectin was dissolved in phosphate-buffered saline at a ratio of 1:1, and then injected into seminiferous tubules. In mice, 8.0-14.8% of seminiferous tubule expressed the introduced LacZ gene, and 7-13% of epididymal spermatozoa were confirmed as having foreign DNA by polymerase chain reaction. The liposome-injected testes were all negative for X-gal staining. These results indicate that some spermatozoa were successfully transformed in their early stages by liposome/DNA complexes. In pigs, foreign DNA was also incorporated efficiently into male germ cells, and 15.3-25.1% of the seminiferous tubules containing germ cells expressed the LacZ gene. The data suggest that these techniques can be used as a powerful tool for producing transgenic livestock.