Agrobacterium tumefaciens is a commonly used tool for transforming dicotyledonous plants. The underlying mechanism of transformation however is not very well understood. One problem complicating the analysis of this mechanism is the fact that most indicator genes are already active in Agrobacterium, thereby preventing the precise determination of timing and localisation of T-DNA transfer to plant cells. In order to overcome this obstacle a modified prokaryotic indicator gene was constructed. The expression of this indicator gene and its use in analysing early events in Agrobacterium-mediated plant transformation are described. A portable intron, derived from a plant intron, was introduced into the beta-glucuronidase (GUS) gene. In transgenic plants containing this chimaeric gene the intron is spliced efficiently, giving rise to GUS enzymatic activity. Mapping of the splice junction indicates the exact removal of the intron. No GUS activity is detected in agrobacteria containing this construct due to the lack of a eukaryotic splicing apparatus in prokaryotes. Early phases after transformation of Arabidopsis cotyledon explants were analysed using this GUS-intron chimaeric gene showing that as early as 36 h after Agrobacterium infection significant GUS activity is detected. In vivo GUS staining of transformed cells clearly shows that quickly proliferating calli expressing GUS activity are formed, mainly at the cut surface. Minor transformation events occur however throughout the whole cotyledon. These data indicate that Agrobacterium-mediated T-DNA transfer to plants is much more efficient than has been judged from experiments where selection is applied immediately. The intron-containing GUS gene can be used as an optimised marker gene in transient and stable transformation experiments.