The promoter region of the suprabasal keratin 10 gene has been used to direct expression of a mutant human Harvey-ras oncogene to the differentiating cells of the mouse epidermis. Transgenic animals develop hyperkeratosis of the skin and forestomach--the two sites known to express high levels of the keratin 10 polypeptide in vivo. Papillomas subsequently develop on the skin surface, initially at sites subject to biting or scratching such as the base of the tail or behind the ears. The results suggest that the "second event" involved in tumor development in these transgenic animals is the local induction of a mild wounding stimulus. Furthermore, because the H-ras transgene is expressed in suprabasal cells, it appears that cells which have left the stem cell compartment can be induced to form at least benign tumors in vivo.