Transgenic mice have been used to address the issue of the oncogenic potential of mutant guanine nucleotide stimulatory factor (Gs) alpha subunit in the thyroid gland. The expression of the mutant Arg-201-->His Gs alpha subunit transgene has been directed to murine thyroid epithelial cells by bovine thyroglobulin promoter. The transgenic animals develop hyperfunctioning thyroid adenomas with increased intracellular cAMP levels and high uptake of [125I]iodine and produced elevated levels of circulating triiodothyronine and thyroxine. These animals demonstrate that the mutant form of Gs alpha subunit carries an oncogenic activity, thus supporting the model that deregulation of cAMP level alters growth control in thyroid epithelium. These animals represent models for humans with autonomously functioning thyroid nodules.