A transgenic mouse line (Tg.AC) carrying an activated v-Ha-ras oncogene fused to the embryonic zeta-globin promoter develops an array of spontaneous epithelial and mesenchymal neoplasms. In this report we describe the morphological, immunophenotypic, and molecular features of a unique hematopoietic neoplasm in these mice. The cardinal lesion of this disease is marked hepatomegaly due to leukemic proliferation and infiltration. In the peripheral blood, there is a marked increase in the number of metarubricytes and other less differentiated erythroid progenitor cells. Leukemic cells stain positively with an erythroid-associated nuclear transcription factor (GATA-1). Using a reverse transcription polymerase chain reaction assay, co-expression of GATA-1 and endogenous zeta-globin genes is detected in hematopoietic tissues of nonleukemic transgenic and nontransgenic mice. ras transgene expression is, however, detected only in normal bone marrow and leukemic tissues of transgenic mice, and 5' mapping experiments using S1 protection analysis of total RNA from leukemic tissue indicates that transcription of the transgene mRNA is initiated from the natural zeta-globin promoter start site, supporting the belief that the zeta-globin promoter directs v-Ha-ras expression in erythroid progenitor cells, ultimately leading to leukemic transformation.