The cooperation of the c-myc oncogene with the growth factor transforming growth factor (TGF)-alpha in development of liver tumors in transgenic mice has been demonstrated previously. In this study, we analyzed the ploidy and karyotype of c-myc, TGF-alpha, parental control, and the double transgenic c-myc/TGF-alpha hepatocytes at 3 weeks of age when the liver is histologically normal and at 10 weeks when the c-myc/TGF-alpha liver is dysplastic and contains basophilic foci. Eighty % of the 10-week hepatocytes were aneuploid, and 32% had chromosomal breakage. Statistically significant breakage was observed in six different chromosomes. Breakage at band A5 and at the border of bands C4/5 of chromosome 1 was observed. Fragile sets on chromosome 4 were most frequent in the middle of the chromosome at bands C2 and C6. Chromosome 6 was fragile at band F2. The region of chromosome 7 at bands B5 and D3 was frequently broken and involved in translocations. Chromosome 12 was broken at bands D1 and D3. The breakage sites on chromosomes 1, 4, 7, and 12 correspond to sites of tumor susceptibility genes in the mouse. Although there was no consistent change in copy number, recurrent translocations between chromosomes 1, 4, 7, 12 and 19 were also observed. These studies demonstrate that the development of dysplasia and basophilic foci in the liver is correlated with aneuploidy and chromosome breakage. The specific fragile sites indicate genetic regions that are altered during early stages of hepatocarcinogenesis. Due to the conservation of genetic linkage groups between mice and humans, the identification of genetic alterations in the mouse during hepatocarcinogenesis may provide critical information about tumor susceptibility genes that are important in the early development of human hepatocellular carcinoma.