Carcinogenesis can be operationally and mechanistically divided into at least three major stages--initiation, promotion, and progression. Variations among stocks and strains of mice to susceptibility to multistage skin and liver carcinogenesis appear to be more related to alterations in tumor promotion than tumor initiation; however, the critical events have not been determined. In the mouse skin model the first stage is thought to involve the interaction of a tumor initiator with the genetic material of stem cells leading to an alteration in some aspect of growth control, differentiation, or both. The major effect of tumor promoters, regardless of the type, is the specific expansion of the initiated stem cells in the skin. This appears to occur by both direct and indirect mechanisms that involve the loss of glucocorticoid receptors, differentiation alterations, a direct growth stimulation of the initiated cells, or selective cytotoxicity. The progression stage is characterized by a high level of genetic instability that produces a number of chromosomal alterations. These changes may be responsible for the loss of the high-molecular-weight keratin proteins and filaggrin, increase in gamma-glutamyl-transpeptidase activity, and changes in oncogene expression in squamous cell carcinomas. We have found that a high percentage of squamous cell carcinomas have a trisomy in chromosome 2 that carries both src and abl genes and an increased expression of src and abl. We have also found increased Ha-ras on RNA expression in both papillomas and squamous cell carcinomas. We suggest that the genetic instability of the initiated cells is responsible for most observed changes during skin carcinogenesis.