Previous studies in which human pulmonary surfactant protein B (SP-B) was targeted to the mammary gland of transgenic mice using the rat whey acidic protein (WAP) regulatory sequences resulted in secretion of only the unprocessed proprotein (42 kDa) in milk. To test the feasibility of producing a partially processed SP-B protein in milk, a new construct was designed in which the coding region for the carboxy-terminal domain was deleted. Expression of rWAP/SP-BDELTA C mRNA was detected in all three transgenic lines generated, and the expected carboxy-terminal deleted SP-B molecule (28 kDa), identified by using domain-specific antibodies, was secreted in the milk. Histochemical examination of lactating mammary tissue from the transgenic line expressing the highest levels of WAP/SP-BDelta C mRNA revealed an inhibition of lobulo-alveolar development, and led to growth retardation in pups, apparently due to the decreased milk production. Mothers from this line tended to cannibalize litters in mid-lactation. This phenotype has been observed previously with several other WAP-based transgenes. This phenotype suggests that there may be an upper limit to the level of SP-BDeltAC which can be produced in milk