Expression of human growth hormone (hGH) was targeted to growth hormone-releasing (GRF) neurons in the hypothalamus of transgenic rats. This induced dominant dwarfism by local feedback inhibition of GRF. One line, bearing a single copy of a GRF-hGH transgene, has been characterized in detail, and has been termed Tgr (for Transgenic growth-retarded). hGH was detected by immunocytochemistry in the brain, restricted to the median eminence of the hypothalamus. Low levels were also detected in the anterior pituitary gland by radioimmunoassay. Transgene expression in these sites was confirmed by RT-PCR. Tgr rats had reduced hypothalamic GRF and mRNA, in contrast to the increased GRF expression which accompanies GH deficiency in other dwarf rats. Endogenous GH mRNA, GH content, pituitary size and somatotroph cell number were also reduced significantly in Tgr rats. Pituitary adrenocorticotrophic hormone (ACTH) and thyroid-stimulating hormone (TSH) levels were normal, but prolactin content, mRNA levels and lactotroph cell numbers were also slightly reduced, probably due to feedback inhibition of prolactin by the lactogenic properties of the hGH transgene. This is the first dominant dwarf rat strain to be reported and will provide a valuable model for evaluating the effects of transgene expression on endogenous GH secretion, as well as the use of GH secretagogues for the treatment of dwarfism.