Male transgenic mice that carry a construct containing 5'-flanking sequences of the gp91-phox gene linked to the early region of the simian virus 40 (SV40) genome reproducibly develop tumors arising from the prostate gland. As gp91-phox is expressed exclusively in terminally differentiating hematopoietic cells of the myelomonocytic lineage, the induction of tumors arising from the prostate gland was unexpected. These lesions appear to be due to a novel transcription signal that was generated during the construction of the transgene. Surprisingly, the histopathological and biochemical properties of the tumor are diagnostic of neuroblastoma rather than of adenocarcinoma of the prostate gland. Tumors produce SV40 T antigen and isoforms of neural cell adhesion molecule characteristic of neuronal cells, and they occur in a testosterone-independent manner. Microscopic examination of prostate glands from young transgenic mice reveals the presence of small lesions arising outside of the prostate gland epithelium, which is consistent with the diagnosis of neuroblastoma and further distinguishes this tumor from prostatic adenocarcinoma. Prostate gland tumors occur in all male animals of susceptible lines carrying the gp91-phox promoter/SV40 early-region transgene. However, variability in the time at which gross tumors appear and the presence of cells expressing T antigen prior to tumorigenesis suggest that somatic events in addition to T-antigen production are required for the development of a malignancy. The extraordinary restriction of the site of tumorigenesis in these animals indicates the presence in the prostate gland of a novel, tissue-specific neuroectodermal cell of origin. These transgenic animals provide a model system for the study of neuroectodermal malignancies.