We have developed a transgenic (TG) mouse model for gonadal tumorigenesis expressing the Simian virus 40 T-antigen (Tag) under the mouse inhibin alpha-subunit promoter. Gonadal tumors appear with 100% penetrance by the age of 5-8 months in the TG mice. When 1-month-old TG mice were gonadectomized, adrenal gland tumors were observed in each animal (12 females, 11 males) at the age of 6-8 months. No adrenal tumors were detected in gonadectomized non-TG mice (nine females, nine males) or in the intact TG mice (n > 100). The tumors appeared to originate from the X zone of the adrenal cortex. The TG mice with adrenocortical tumors had elevated serum levels of progesterone, estradiol, and immunoreactive inhibin (including dimeric forms), but corticosterone secretion was reduced. The lack of adrenal tumors in intact TG mice suggested that the tumorous gonads secrete factor(s) inhibiting adrenal tumorigenesis. As a candidate molecule, we studied the effects of inhibin, which was high in the serum of control females and TG females with ovarian tumors, as well as in TG males with testicular tumors. The DNA synthesis, as well as the levels of inhibin-alpha and Tag mRNA expression, were significantly reduced by recombinant human inhibin A in cell cultures derived from the adrenal tumors. In accordance, the expression level of inhibin-alpha mRNA in the normal adrenal gland was elevated 2 weeks after gonadectomy. These findings suggest that gonadal inhibin can down-regulate the expression of the inhibin alpha-subunit gene in the adrenal gland. When circulating inhibin is eliminated by gonadectomy, Tag expression and tumorigenesis are stimulated in the adrenal glands of the TG mice. The results demonstrate a novel mechanism of autoregulation in inhibin alpha-subunit gene expression.