The potential of tissue inhibitors of metalloproteinases (TIMPs) to inhibit neoplastic progression has been postulated from studies of genetically manipulated cells. To investigate whether the TIMP-1 expressed in a host tissue suppresses cancer in vivo and to identify the affected stages, we developed transgenic mice with constitutive overexpression or reduction of TIMP-1 in the liver. In double transgenic experiments, the TIMP-1 lines were crossed with a second transgenic line which expresses the Simian Virus 40t/T antigen (TAg). This viral oncogene leads to heritable development of hepatocellular carcinomas with a 100% incidence. Effects of TIMP-1 coexpression on the TAg-induced neoplasms were determined at the tissue and cellular level. Here, we report that overexpression of hepatic TIMP-1 blocked the development of TAg-induced hepatocellular carcinomas. High TIMP-1 levels inhibited not only the later stages in tumor development (growth and angiogenesis), but also events associated with tumor initiation (altered hepatocyte cytology and tissue architecture). We further show that an antisense-mediated reduction of TIMP-1 resulted in a more rapid tumor initiation and progression. These data demonstrate that intrinsic TIMP-1 levels contribute to a tissue's susceptibility to viral oncogene-induced tumorigenesis.