Transgenic rats expressing the pX gene of human T lymphocyte virus type-I (HTLV-I) under control of the rat lymphocyte-specific protein tyrosine kinase type-I promoter (lck-pX rats) developed benign epithelial thymomas. When the thymuses of newborn lck-pX rats were transplanted into the subcapsular space of the kidney in other thymectomized lck-pX rats, similar tumors developed in the transplanted thymuses. Following the tumor growth, dissemination in the abdominal cavity and distant metastasis occurred. The tumors were histopathologically similar to the original thymomas, but prominent nuclear atypia and high mitotic activity were present. The Ki-67 index was twice as high as that in the originals. The tumors were transplantable into the subcutis of lck-pX rats, although transplantation of the originals never succeeded. All evidence indicated that malignant transformation of thymoma was induced by the heterotopic transplantation. Expression of the pX transgene in the transformed tumors were significantly reduced. Among host genes, the expression of p16ink4a/ARF, which was significantly upregulated in the originals, was never detected in the transformed tumors. Genomic Southern blots and PCR suggest that homozygous deletion of the p16ink4a/ARF gene may play important roles in malignant transformation in this model. Our model described here is a useful unique model for in vivo malignant transformation.