We have targeted a K-ras allele in mouse embryonic stem (ES) cells to express a K-Ras^V12 oncoprotein along with a marker protein (β-geo) from a single bicistronic transcript. Expression of this oncogenic allele requires removal of a knocked in STOP transcriptional cassette by Cre recombinase. Primary mouse embryonic fibroblasts expressing this K-ras^V12 allele do not undergo proliferative senescence and proliferate as immortal cells. In mice, expression of K-ras^V12 throughout the body fails to induce unscheduled proliferation or other growth abnormalities for up to eight months. Only a percentage of K-ras^V12-expressing lung bronchiolo-alveolar cells undergo malignant transformation leading to the formation of multiple adenomas and adenocarcinomas. These results indicate that neoplastic growth induced by an endogenous K-ras oncogene depends upon cellular context.