Bacterial beta-galactosidase, encoded by the lacZ gene, serves as a sensitive cytochemical marker in eukaryotic cells and tissues. In transient expression experiments, human and simian cells stain blue 48 hr after transfection with a plasmid containing a lacZ gene, whose expression is directed by a simian virus 40 promoter containing a synthetic lactose operator sequence. Transfection efficiency was about 0.6%. Incorporation of an operator sequence within the promoter permits regulation of beta-galactosidase gene expression by the lacI gene product, the lac repressor. When cells were cotransfected with the lacZ plasmid and a second plasmid containing the lacI gene, beta-galactosidase activity was extinguished. Its activity could be reestablished to original levels upon application of isopropyl beta-D-thiogalactoside to transfected cells. A cell line that stably carries both the lacI and lacZ genes was efficiently induced to synthesize beta-galactosidase after isopropyl beta-D-thiogalactoside administration. In transient expression experiments and in stably transfected lines, repression and induction of beta-galactosidase activity were predominantly at the transcriptional level.