We have developed transgenic mice that inherit albumin promoter-regulated simian virus 40 (SV40) large T antigen gene, expressed specifically in hepatocytes. These mice all develop multifocal hepatocellular carcinomas at around 5 months and die of liver insufficiency by 7 months. Sequential morphological observation of hepatocarcinogenesis revealed 5 distinct stages: (I) newborn to 2 weeks of age, neither recognizable histological changes nor cellular replication in spite of T antigen expression; (II) between 3 and 7 weeks, diffuse cytomegalic change of hepatocytes with numerous abnormal mitoses, usually resulting in cell death; (III) from 7 weeks onwards, quasi-regenerative small hepatocyte foci with a decreased tendency for cytomegaly in spite of T antigen expression, rapidly replacing the hepatic tissue; (IV) 11 weeks of age and thereafter, neoplastic foci and nodules with enzymatic alteration; (V) 20 weeks of age and thereafter, gross hepatocellular carcinomas with occasional pulmonary metastases. Considerable variation existed both in morphological and enzymatic features and T antigen expression among neoplastic lesions, including carcinomas. Thus, these transgenic mice clearly show a multistep process in hepatocarcinogenesis with remarkable synchrony and provide a promising model for analyzing the essential events of carcinogenesis at different stages.