Previous studies in our laboratory have demonstrated the mammary-specific expression of the entire rat beta-casein gene with 3.5 kilobases (kb) of 5' and 3.0 kb of 3' DNA in transgenic mice (Lee et al., Nucleic Acids Res. 16:1027-1041, 1988). In an attempt to localize sequences that dictate this specificity, lines of transgenic mice carrying two different rat beta-casein promoter-bacterial chloramphenicol acetyltransferase (cat) fusion genes have been established. Twenty and eight lines of transgenic mice carrying two fusion genes containing either 2.3 or 0.5 kb, respectively, of 5'-flanking DNA of the rat beta-casein gene along with noncoding exon I and 0.5 kb of intron A were identified, most of which transmitted the transgenes to their offspring in a Mendelian pattern. CAT activity was detected predominantly in the lactating mammary gland of female transgenic mice but not in the male mammary fat pad. A several-hundred-fold variation in the level of cat expression was observed in the mammary gland of different lines of mice, presumably due to the site of integration of the transgenes. CAT activity was increased in the mammary gland during development from virgin to midpregnancy and lactation. Unexpectedly, the casein-cat transgenes were also expressed in the thymus of different lines of both male and female mice, in some cases at levels equivalent to those observed in the mammary gland, and in contrast to the mammary gland, CAT activity was decreased during pregnancy and lactation in the thymus. Thus, 0.5 kb of 5'-flanking DNA of the rat beta-casein gene along with noncoding exon I and 0.5 kb of intron A are sufficient to target bacterial cat gene expression to the mammary gland of lactating mice.