We have generated a transgenic calf from in vitro produced bovine embryos which had undergone transgene analysis and sexing prior to the embryo transfer. Bovine oocytes were isolated from slaughter-house-derived ovaries, matured and fertilized in vitro and subsequently microinjected with a dam-methylated gene construct consisting of genomic sequences encoding human erythropoietin and governed by bovine alpha S1-casein regulatory sequences. After 6 to 7 days in culture, the embryos were biopsied and while the embryo remained in culture, the biopsy was subjected to transgene analysis and sexing. The transgene analysis was accomplished with a combined treatment of the embryo lysates with DpnI restriction endonuclease and Bal31 exonuclease followed by polymerase chain reaction (PCR). The transgene analysis was based on the fact that DpnI only cleaves its recognition sequence if the adenine in the sequence is methylated. Pregnancy was induced by the transfer of three viable female embryos with a distinct transgene signal to a hormonally synchronized heifer recipient. Amniotic fluid analysis performed two months after the embryo transfer confirmed the presence of the transgene. The calf born was found to be transgenic by PCR analysis from blood, ear and fetal membranes. The presence of the transgene was also confirmed by Southern blotting.