The generation of mice designed to overexpress activated forms of oncogenes or carrying targeted mutations in tumour suppressor genes, has allowed scientists to causally link the function of these genes with specific tumour processes, such as proliferation, apoptosis, angiogenesis or metastasis. In addition, these mice have been interbred to assess the extent of cooperativity between different genetic lesions in disease progression, leading to a greater understanding of the multi-stage nature of tumourigenesis. The effect of genetic mutations is often influenced by the genetic background of the mouse and by analysing strain-dependent phenotypes, modifier loci have been identified. Although genetic mutations in mouse and humans do not always lead to the same tumour spectrum, the underlying molecular mechanisms are frequently relevant to both species. Furthermore, new technical approaches creating conditional mouse mutants which develop tumours in a tissue-specific manner, will allow the effect of mutation of certain genes to be studied in specific tissues, free from the fatal effects of the mutation in other clinically less relevant tissues. Several exising mouse strains have already been used to develop and test new therapies and conditional mutagenesis will undoubtedly increase the potential use of transgenic mice in understanding and treating cancer.