Rats of susceptible genetic backgrounds expressing high copy numbers of the transgene encoding HLA-B27 and human beta 2 mu develop chronic colitis complicated in the advanced stage by adenomatous polyps progressing to adenocarcinoma. Unique features of this model include a spectrum of extraintestinal manifestations resembling to some extent human spondyloarthropathy, with peripheral and axial joint, dermatologic and male genital inflammation. Inflammation is T lymphocyte mediated, although surprisingly CD4+ cells are more active in transferring disease than CD8+ cells, which would be expected to be preferentially activated by Class I MHC peptides. Inflammation is dependent on a nonlymphoid bone marrow-derived cell, expressing high copy numbers of B27, probably APCs. In vitro function of transgenic dendritic cells is deficient, and in vivo competition for peptide binding in the antigen binding site of B27 attenuates arthritis. Normal bacteria are required for disease expression, with B. vulgatus preferentially able to induce colitis, whereas other bacteria such as E. coli stimulate no inflammatory response. Inflammation and resulted complications are modulated by non-MHC genes and are amenable to treatment by bone marrow transplant from normal donors. These results support the hypothesis that gastrointestinal and systemic inflammation in B27 transgenic rats is the result of loss of tolerance to enteric bacteria, as a consequence of defective APC (? dendritic cells) function. Whether disease is the result of selective MHC binding of enteric antigens uniquely capable of inducing disease, lack of appropriate induction of a CD8+ suppressor cell population, or skewed cytokine (IL-12, IL-18) secretion by APCs remains to be determined.