Expression of cell cycle regulatory genes in mouse lung was investigated in transgenic models for Clara cell transformation. Clara cells were transformed by generating transgenic mice in which the SV40 large T antigen was expressed under the control of the mouse Clara cell M(r) 10,000 protein promoter. The resulting lung tumors express the large T antigen in normal Clara cells and in tumors, and these tumors express reduced levels of CC10 mRNA. The expression of cell cycle regulatory protein, p53, and the cyclin-dependent kinase inhibitors was analyzed by Northern blot analysis and in situ hybridization throughout the progression of Clara cell transformation in the lung. Increases in specific cyclin-dependent kinase inhibitor steady-state mRNA levels were detected in p15, p18, p27, and p57 during tumor progression. The expression of p15, p57, and p21 mRNAs were verified by in situ hybridization. Using this approach, regulatory genes have been identified that may be involved in the regulation of Clara cell differentiation.