Transgenic mice overexpressing insulin-like growth factor-1 (IGF-1) in the basal layer of skin epidermis were generated using the bovine keratin 5 promoter (BK5). Neonatal transgenic mice were slightly smaller at birth and exhibited early ear unfolding, wrinkled and thickened skin, and slightly enlarged ears compared with nontransgenic littermates. Morphological evaluation of the skin revealed that persistent overexpression of IGF-1 in the basal layer of the epidermis resulted in epidermal hyperplasia, hyperkeratosis, and an increased labeling index that persisted in adult mice. Phenotypic changes observed in skin were associated with transgene expression in the basal layer of the epidermis and activation of the IGF-1 receptor. Squamous papillomas (some of which converted to carcinomas) developed in a significant proportion (∼50%) of older BK5.IGF-1 mice. Treatment of BK5.IGF-1 transgenic mice with multiple topical applications of the phorbol ester, 12-O-tetradecanoylphorbol-13-acetate, in the absence of tumor initiation led to the development of additional skin papillomas. Furthermore, treatment of BK5.IGF-1 transgenic mice with an initiating dose of 7,12-dimethylbenz[a]anthracene only led to the formation of additional papillomas in the absence of promotion. In two-stage carcinogenesis experiments, BK5.IGF-1 transgenic mice developed 7-fold more papillomas than nontransgenic littermates. Phosphatidylinositol-3-kinase and protein kinase B (Akt) activities were elevated (3–4-fold), and mitogen-activated protein kinase activity was elevated ∼1.7-fold in the epidermis of transgenic mice compared with nontransgenic mice. In addition, UV light-induced epidermal apoptosis was significantly suppressed in BK5.IGF-1 transgenic mice. These data suggest that persistent activation of IGF-1 receptor signaling pathways in basal epithelial cells leads to spontaneous tumor promotion and that up-regulation of both mitogenic and cell survival signaling pathways may play an important role in the action of IGF-1 in this model system.