Human T-cell lymphotropic virus type I (HTLV-I) has been associated with an adult form of T-cell leukemia as well as tropical spastic paraparesis, a neurodegenerative disease. Adult T-cell leukemia patients express high levels of the type 1 isoform of transforming growth factor-β (TGF-β1), which is mediated by the effects of the HTLV-I Tax transactivator protein on the TGF-β1 promoter. To understand further the regulation of TGF-β1 expression by Tax, we examined its expression in transgenic mice carrying the HTLV-I tax gene. We show that tumors from these mice and other tissues, such as submaxillary glands and skeletal muscle, which express high levels of tax mRNA selectively express high levels of TGF-β1 mRNA and protein. Moreover, TGF-β1 significantly stimulated the incorporation of tritiated thymidine into one of three cell lines derived from neurofibromas of tax-transgenic mice, which suggests that the excessive production of TGF-β1 may play a role in tumorigenesis and that these mice may serve as a useful model for studying the biological effects of TGF-β in vivo.