We have generated transgenic mice that express the intracellular anti-influenza virus protein Mx1 under control of an interferon-responsive regulatory element. Upon infection with influenza virus, mice of a high responder line produce Mx1 protein locally at the sites of initial viral replication, exhibit little viral spread, and survive infection. Mice of a low responder line show more extensive viral spread and survive infection only when virus is given at high doses. To survive low dose infections, these mice require injection of interferon along with virus. The results show that influenza viral pathogenesis is determined by a subtle balance between the dose of the infecting virus and the levels of the antiviral host factor Mx1 and that mice can be rendered resistant to a virulent infection by "intracellular immunization" achieved through germline transformation.