We developed mice with germline endogenous expression of oncogenic Hras to study effects on development and mechanisms of tumor initiation. They had high perinatal mortality, abnormal cranial dimensions, defective dental ameloblasts, and nasal septal deviation, consistent with some of the features of human Costello syndrome. These mice developed papillomas and angiosarcomas, which were associated with Hras^G12V allelic imbalance and augmented Hras signaling. Endogenous expression of Hras^G12V was also associated with a higher mutation rate in vivo. Tumor initiation by Hras^G12V likely requires augmentation of signal output, which in papillomas and angiosarcomas is achieved via increased Hras-gene copy number, which may be favored by a higher mutation frequency in cells expressing the oncoprotein.