Multidrug resistance resulting from expression of an energy-dependent drug efflux pump encoded by the human MDR1 gene is a major impediment to effective cancer therapy. Pharmacologic intervention aimed at inhibiting this multidrug transporter should improve existing chemotherapy of human cancer, but drug development has been delayed by the difficulty and expense of developing valid animal models. Using recombinant DNA technology, a transgenic mouse has been engineered whose bone marrow is protected from the toxic effects of chemotherapy by expression of the MDR1 gene. This animal system allows the rapid screening of drugs which inhibit the multidrug transporter and heralds a new era of using transgenic animals for pharmacologic screening.