The goal of understanding the molecular basis of human tumor development has been greatly facilitated by the use of animal model systems in which the etiology of tumor development can be carefully controlled. Environmental chemicals, either naturally occurring or artificially produced, are thought to make a major contribution to the human tumor burden. Many of the concepts of multistage carcinogenesis have been developed and refined using the mouse skin model system and the work described in this article has been carried out in an attempt to analyze the molecular changes that are associated with the initiation of tumor development, the selection of initiated cells to form papillomas, or the progression of premalignant tumors to carcinoma. We have analyzed a number of skin tumors induced in mice by a two-stage initiation and promotion protocol and have detected a high frequency of c-ras oncogene mutations in this system. The mutation found in each case correlates well with the known reactivity of the carcinogens used. It has also been shown that where ras activation occurs this represents an early event in the tumor model system. Transforming growth factor beta is induced in mouse skin by tumor promoter treatment and may therefore play a role in the selection of initiated cells to form papillomas. Additional events, some of which involve the loss of normal ras alleles and possibly tumor suppressor genes, appear to take place at a later stage of carcinogenesis.