Teratocarcinoma (TCC) stem cells provide unique prospects for the introduction of specific genes into mice, by virtue of their dual capacity for propagation in vitro and for normal differentiation in embryos. In this study, we have demonstrated that foreign genes amenable to selection in culture can be transferred into the stem cells and expressed. These cells maintain expression of the gene for long periods during differentiation in tumors in vivo in the absence of selective pressure. The cells also integrate an unlinked nonselectable gene at high frequency. Addition of the cloned herpes simplex virus (HSV) thymidine kinase (tk; ATP:thymidine 5'-phosphotransferase, EC 2.7.1.21) gene to cultures of tk(-)TCC cells yielded tk(+) colonies at a frequency of one colony per 4 mug of plasmid DNA. This transformation efficiency, although appreciably lower than for mouse L tk(-) cells, permits the isolation of many transformants. The HSV provenance of the transformed phenotype was verified by the characteristic electrophoretic mobility of the tk protein and by neutralization of the tk activity with specific antiserum. Moreover, blot hybridization tests revealed at least one intact copy of the viral tk gene integrated into the DNA of transformed cells. When injected into syngeneic mice, the cells formed solid tumors with various differentiating tissues. From blot hybridization comparisons with their cell lines of origin, seven of nine tumors examined had maintained the HSV tk gene without significant loss or rearrangement. Viral tk enzyme activity could also be demonstrated in at least some of the tumors. Cotransfer of the cloned human beta-globin gene along with the unlinked HSV tk gene was successful in 2 of 10 tk(+) transformants. Thus, defined genes can be stably introduced into TCC cells in culture and maintained in vivo in a form in which they are transcribed and translated to produce a functional protein.