Human carcinoembryonic antigen (CEA), a widely used clinical tumor marker, and its close relative, CEACAM6, are often overexpressed in many cancers. This correlation suggests a possible instrumental role in tumorigenesis, which is supported by extensive results obtained with several in vitro systems. The implication that these results could also apply in vivo warrants investigation. Since mice do not possess homologs of the glycophosphatidyl inositol (GPI)-anchored CEACAM family genes CEA, CEACAM6 and CEACAM7, we have constructed transgenic mice harboring a 187 kb portion of the human CEACAM family gene locus contained in a bacterial artificial chromosome (CEABAC) that includes genes coding for CEA, CEACAM6 and CEACAM7. In this study, we treated the CEABAC mice and their wild-type littermates with azoxymethane (AOM) in order to induce colon tumor formation. At 20 weeks post-treatment, the CEABAC transgenics showed more than a 2-fold increase in mean tumor load relative to their wild-type littermates. Cell surface expression of CEA and CEACAM6 increased by 2- and 20-fold, respectively, in colonocytes from the tumors relative to colonocytes from non-AOM treated transgenics and a de-regulated spatial pattern of CEA/CEACAM6 expression was found in 'normal' crypts adjacent to the tumors, thus mimicking closely the situation in human colon tumorigenesis. A modestly increased incidence of beta-catenin mutations also observed in the AOM-induced CEABAC tumors. These results show that expression of the human GPI-anchored CEACAM family genes predisposes mice to acquire and/or retain essential mutations necessary for sporadic colon tumor development.