By targeting the expression of sequences encoding non-milk proteins to the mammary gland of transgenic farm animals, the organ could serve as a 'bioreactor' for producing pharmacologically active proteins on a large scale. Here we report the generation of transgenic sheep bearing a fusion gene construct with the human blood clotting factor VIII (hFVIII) cDNA under the transcriptional control of a 2.2 kb fragment of the mammary gland specific promoter of the ovine beta-Lactoglobulin (beta-Lac) gene. Six founder animals were generated bearing a hFVIII cDNA construct with the introns of the murine metallothionein (MtI) gene (beta-Lac/hFVIII-MtI). Founders transmitted the transgene in a Mendelian fashion and two transgenic lines were generated. Ten out of 12 transgenic F1-females expressed rhFVIII mRNA in exfoliated mammary epithelial cells isolated from the milk. But only in transgenic F1 ewes 4010 and 603 hFVIII clotting activity estimated at 4-6 ng/ml was detected in defatted milk. Furthermore, the presence of rhFVIII-protein in ovine milk was demonstrated by a specific band at approximately 190 kD following immunoprecipitation and immunoblotting. Transgenic founder 395 expressed rhFVIII mRNA in biopsied mammary gland tissue, in exfoliated mammary cells as well as ectopically in brain, heart, spleen, kidney and salivary gland, suggesting that the employed beta-Lac promoter fragment lacks essential sequences for directing expression exclusively to the mammary gland. A rhFVIII standard preparation (rhFVIIIstd) was rapidly sequestered in a saturable fashion in ovine milk, thus rendering it largely inaccessible to immunoprecipitation although its biological activity was retained. Recovery of hFVIIIstd was dependent on milk donor, storage temperature and dilution of milk sample.