BACKGROUND: Transgenic mice carrying the polyoma (Py) early region gene develop both vascular and bone tumors that express the transgene (R. Wang and V. L. Bautch, J. Virol. 65:5174-5183, 1991). To determine the correlation between bone tumor formation and transgene expression, mice of two lines that showed differences in tumor pattern were analyzed. EXPERIMENTAL DESIGN: Py DNA encoding the early region gene was inserted into B6D2F1 mouse embryos. Transgenic mice were sacrificed at appropriate times in development, and the histopathology of the skulls and genotype analyses were performed independently. Py transgene expression was assayed in individual skulls or small groups of skulls. RESULTS: In mice of the Py-4 line, Py oncogene expression was detectable in skulls from 14.5 days of development. These mice had normal skulls at birth, and they developed lesions histologically resembling osteosarcoma synchronously 1 to 2 weeks after birth. Mice of the Py-3 line did not express detectable levels of transgene at 3 weeks of age, and they did not develop detectable skull pathology at this age. Less than 20% of adult Py-3 mice developed calvarial osteosarcoma-like lesions, and a similar number of these mice expressed the transgene in the skull. CONCLUSIONS: These data show that Py transgene expression in bone of the skull is differentially regulated in mice of the two lines, and they indicate that epigenetic changes may be sufficient to complement expression of the Py oncogene in neoplastic bone formation during development.