We have developed a binary transgenic system that activates an otherwise silent transgene in the progeny of a simple genetic cross. The system consists of two types of transgenic mouse strains, targets and transactivators. A target strain bears a transgene controlled by yeast regulatory sequences (UAS) that respond only to the yeast transcriptional activator GAL4. A transactivator strain expresses an active GAL4 gene that can be driven by any selected promoter. The current paradigm uses the murine growth factor int-2 cDNA as the target gene and the GAL4 gene driven by the mouse mammary tumor virus long terminal repeat as the transactivator. Both target and transactivator strains are phenotypically normal. By contrast, the bigenic offspring of these two strains express high levels of the target int-2 gene in each organ expressing the GAL4 transactivator. They also display a characteristic dominant int-2 phenotype that consists of epithelial hyperplasia in mammary and salivary glands, as well as prostatic and epididymal hypertrophy, which results in male sterility.