The human polyomavirus, JCV, is the established etiologic agent of the human demyelinating disease, progressive multifocal leukoencephalopathy (PML) seen in immunosuppressed individuals. In PML patients, the viral early protein, which is produced exclusively in glial cells is responsible for initiation of the viral lytic cycle. The JCV early protein, T-antigen, has greater than 70% homology to the well characterized SV40 early protein which has established oncogenic properties. To investigate the role of JCV T-antigen in tumorigenesis, transgenic mice containing the viral early genome were produced. Of the four positive transgenic animals, one developed severe neurological abnormalities and succumbed to death at 3 weeks of age. Another animal died with no visible gross pathology and the cause of death was not determined. The remaining two founders developed massive, undifferentiated, solid mesenteric tumors with no obvious neurological symptoms. Results from histologic analysis demonstrated the presence of highly cellular, poorly differentiated neoplastic cells in the tumor tissue. Electron microscopic evaluation of the tumor revealed the presence of a small blue cell-like tumor of epithelial/neuroectodermal origin. Results from RNA analysis by non-quantitative and highly sensitive RT-PCR indicated the presence of the JCV early transcript in various tissues, including kidney, liver, spleen, heart, lung, and brain, as well as in the tumors. However, analysis of the viral early protein by Western blot and immunohistochemistry indicated high level production of JCV early protein in the tumor tissue, but not in any other tissues. These observations present the first evidence for the development of inheritable neuroectodermal tumors induced by the human polyomavirus, JCV, early protein in a whole animal system.