Gene transfer of reporter genes may trigger immune responses against the heterologous protein resulting in shortening of gene expression and inflammation. We generated transgenic rats expressing the lacZ gene under the control of the human immunodeficiency virus type 1 (HIV-1) long-terminal repeat (LTR) (HIV-lacZ) to obtain rats with undetectable transgene expression using histologic methods, thus avoiding interference with beta-galactosidase (beta-gal) expression from gene transfer, and displaying immune tolerance toward beta-gal. LacZ transgenic mice with tolerance toward beta-gal have already been used for gene transfer but rats constitute unique animal models with several advantages compared to mice. Two transgenic lines displayed low levels of beta-gal mRNA in most organs tested, as detected only by reverse transcription-polymerase chain reaction (RT-PCR). The protein was undetectable by immunohistology and was only detected in the thymus and spleen using a sensitive enzyme-linked immunosorbent assay (ELISA). HIV-lacZ transgenic rats displayed immune tolerance to beta-gal because immunization with beta-gal resulted in markedly lower cellular and antibody responses compared to wild-type controls, whereas immunization with a nonrelated antigen, keyhole limpet hemocyanin (KLH), resulted in comparable immune responses. The usefulness of this model in gene transfer was tested using a retroviral vector, which does not elicit destructive immune responses against transduced cells. Retroviral-mediated nlslacZ gene transfer in the liver resulted in nuclear beta-gal expression for longer than 12 months in HIV-lacZ transgenic rats, whereas wild-type controls showed nuclear beta-gal expression for less than 1 month. After gene transfer of nlslacZ to the liver, antibodies, cytotoxic T lymphocytes (CTLs), and proliferation against beta-gal were detected in wild-type controls but not in HIV-lacZ transgenic rats. In conclusion, HIV-lacZ transgenic rats displaying low beta-gal expression and immune tolerance toward beta-gal are a useful tool to analyze the spatial and temporal expression of the beta-gal protein in gene transfer experiments using lacZ as a reporter gene.