Transgenic mice were produced containing the adipocyte-specific regulatory region from the adipocyte P2 (aP2) gene linked to the simian virus 40 transforming genes. Most of the transgenic mice developed brown fat tumors (hibernomas) in their interscapular brown adipose tissue. Hibernoma formation was noticeable in some of the mice as early as 1 day after birth and most of the mice developed very large tumors by 1 month of age. All of the tumor tissue expressed the brown fat-specific uncoupling protein (UCP) gene as well as the aP2 gene. Several of the tumors have been used to establish cultured cell lines and at least one of these lines can be induced to differentiate into brown adipocytes. The cultured adipocytes express mRNA for UCP upon stimulation with N6,O2'-dibutyryladenosine 3',5'-cyclic monophosphate, norepinephrine, isoproterenol or D7114, a beta 3 adrenergic agonist. Thus, regulation of the key thermogenic gene UCP can now be studied in an established cell line.