The introduction of cloned genes into the mouse germ line is now routine. Although more difficult technically, gene transfer has been accomplished in farm animals and offers the potential for genetic improvement. In this regard, we have been investigating the use of transgenic animals as production vehicles for high value proteins in milk. We have shown that DNA sequences derived from the gene encoding sheep beta-lactoglobulin mediate efficient and specific expression in the mammary gland. A fusion gene comprising beta-lactoglobulin sequences and those encoding antihemophilic human factor IX has been constructed. This construct has been introduced into sheep; it is expressed in the mammary gland, and the corresponding protein is secreted into milk.