Wnt-10b is expressed during the formation of the mammary rudiment in mouse embryos and its expression continues through puberty when the mammary ductal pattern is established under control of ovarian steroids. Recently, viral activation of the Wnt-10b locus has linked its overexpression to mammary tumor formation, suggesting a role for Wnt-10b in patterning and growth-regulation of the mammary gland. To test this notion, we created lines of transgenic mice that express elevated levels of Wnt-10b under the control of the MMTV promoter/enhancer. Overexpression of this gene resulted in profound developmental alterations in the mammary gland, including expanded glandular development and the precocious appearance of alveoli in virgin females. Moreover, transgenic male mice also exhibited dramatic mammary development involving highly branched mammary ducts and gynecomastia. Aberrant expression of Wnt-10b in the mammary rudiments of males evidently bypasses the normal requirement for ovarian hormonal control in stimulating mammary ductal growth and the repressive effects of androgens. In addition to these developmental effects, transgenic mice of both sexes were highly susceptible to the development of mammary adenocarcinomas. Such tumors arose in a solitary manner indicating that Wnt-10b is a proto-oncogene which provides a necessary, but insufficient signal for oncogenesis. Relevant to this, there was no evidence of amplified expression of FGF mRNAs in these tumors though the Fgf's are a class of genes often implicated as collaborators in Wnt-mediated tumor formation. Indeed, co-expression of MMTV-Wnt-10b and MMTV-FGF-3/int-2 resulted in sterile offspring with highly disorganized mammary epithelium, demonstrating a potent interaction between their respective developmental pathways. These results suggest that Wnt-10b, or other Wnt genes expressed early in mammary development, play a role in regulating sexual dimorphism and show potent transforming activity when overexpressed.