A rat strain carrying the human c-Ha-ras protooncogene, established by our laboratory, is highly susceptible to mammary chemical carcinogens. The transgenic rats exhibit increased number of terminal endbuds (TEBs) at the tips of developing ducts in the mammary gland compared to non-transgenic littermates. Confocal microscopy revealed the level of active mitogen-activated protein kinase to be elevated in these TEBs, and a close correlation between their numbers and tumorigenic response initiated by 7,12-dimethylbenz[a]anthracene was confirmed. Single injections of N-methyl-N-nitrosourea into the transgenic rats caused mutations in codon 12 of human c-Ha-ras transgene in TEBs before tumor development, supporting the conclusion that these structures are the major targets of chemical carcinogens. In contrast, with spontaneous development of lesions, alveolar hyperplasia with elevated expression levels of rat and human c-Ha-ras protooncogenes is the first morphological alteration which becomes apparent. Some but not all hyperplastic alveolar nodules were found to harbor mutations in the transgene. The results indicate that elevated expression of c-Ha-ras protooncogene is sufficient in itself to cause a highly proliferative phenotype of mammary alveoli. Our data suggest that TEBs and acini are the major targets for chemical and sporadic carcinogenesis, respectively, in the mammary glands of human c-Ha-ras protooncogene transgenic rats.