We have previously described a line of transgenic mice (TG3) that spontaneously develops heritable malignant melanoma. Histological analysis of these animals during the first postnatal month is described here. In the TG3 line, the number of melanocytes is increased at all anatomical sites to which neural-crest-derived melanocytes normally migrate. Clonal expansion and morphological changes of these melanocytes can be detected as early as postnatal day (PND) 15. By PND 30, cells morphologically indistinguishable from the tumor cells of adult transgenic mice were detected in the ear, eye lid and perianal region. These cells are believed to be the precursors of the primary tumors in adult mice. The stepwise development of melanoma in the TG3 line is similar to the stepwise development of melanoma in humans.