There is general agreement in the scientific community on the need to improve carcinogenicity testing and the assessment of human carcinogenic risk and to incorporate more information on mechanisms and modes of action into the risk assessment process. Advances in molecular biology have identified a growing number of genes such as protooncogenes and tumor-suppressor genes that are highly conserved across species and are associated with a wide variety of human and animal cancers. In vivo transgenic rodent models incorporating such mechanisms are used to identify mechanisms involved in tumor formation and as selective tests for carcinogens. Transgenic methods can be considered an extension of genetic manipulation by selective breeding, which long has been employed in science and agriculture. The use of two rodent species in carcinogenicity testing is especially important for identifying transspecies carcinogens. The capacity of a substance to induce neoplasia across species suggests that the mechanism(s) involved in the induction of the neoplasia are conserved and therefore may have significance for humans. Based on available information there is sufficient experience with some in vivo transgenic rodent carcinogenicity models to support their application as complementary second species studies in conjunction with a single 2-year rodent carcinogenicity study. The optional substitution of a second 2-year rodent carcinogenicity study with an alternative study such as an in vivo transgenic carcinogenicity study is part of the International Conference on Harmonization guidance S1B: Testing for Carcinogenicity of Pharmaceuticals. This guidance is intended to be flexible enough to accommodate a wide range of possible carcinogenicity assessment models currently under consideration or models that may be developed in the future. The use of an in vivo transgenic mouse model in place of a second 2-year mouse study will improve the assessment of carcinogenic risk by contributing insights into the mechanisms of tumorigenesis and potential human relevance not available from a standard 2-year bioassay. It is envisioned that this will stimulate the further development of more efficient and relevant methods for identifying and assessing potential human carcinogenic risk, which will benefit public health.