Anti-Müllerian hormone inhibits granulosa cell growth and function. Both anti-Müllerian hormone and its type II receptor are expressed in normal granulosa cells. We show by histologic and molecular analyses that ovarian tumors developing in transgenic mice, obtained by targeted oncogenesis using an anti-Müllerian hormone promoter-SV40 oncogene construct, are of granulosa-cell origin. Because tissue-specific, cell-surface molecules are of particular interest for the analysis and treatment of tumors, we examined the expression of anti-Müllerian hormone type II receptor in the ovaries of these transgenic mice. We demonstrate that the anti-Müllerian hormone type II receptor is expressed not only in normal ovarian follicles, but also in granulosa cell tumors. Using a cell line derived from one of these tumors, we show that the anti-Müllerian hormone type II receptor protein is present on the surface of tumor cells and binds anti-Müllerian hormone. Furthermore, we show that the anti-Müllerian hormone receptor is functional in the granulosa tumor cell line, with anti-Müllerian hormone treatment inducing selective activation of Smad1. In conclusion, in this study we present a new murine transgenic model of granulosa cell tumors of the ovary and, using this model, we demonstrate for the first time cell-surface expression of a highly tissue-specific molecule, anti-Müllerian hormone type II receptor, as well as the selective activation of Smad proteins by anti-Müllerian hormone, in granulosa tumor cells.