Transgenic animals were developed to assess the role of insulin-like growth factor 1 (IGF-1) in skin growth, differentiation and organization, as well as its importance in tumor formation. Expression of a human IGF-1 cDNA was targeted to the interfollicular epidermis of transgenic mice using a human keratin 1 promoter construct (HK1). Transgenic animals (HK1. IGF-1 mice) could be identified at birth by early ear unfolding and excessive ear and skin growth compared to non-transgenic littermates. Further examination of the skin from these mice showed epidermal hyperplasia and hyperkeratosis, marked thickening of the dermis and hypodermis, and early hair follicle generation in newborns. The severity of this phenotype correlated with transgene expression both of which subsided with age. Adult HK1. IGF-1 mice developed spontaneous tumors following treatment with 12-O-tetradecanoylphorbol-13-acetate (TPA) alone and exhibited an exaggerated epidermal proliferative response following treatment with the tumor promoter compared to non transgenic littermates. Additionally, HK1. IGF-1 transgenic mice developed papillomas faster and in markedly greater numbers compared to non-transgenic littermates in standard initiation-promotion experiments. The data presented suggest an important role for IGF-1 in the process of multistage carcinogenesis in mouse skin.