JC virus (JCV) causes the chronic human demyelinating disease progressive multifocal leukoencephalopathy. Because of host range restrictions, experimental models of JCV-induced demyelination have not been available. The restricted tropism of JCV infectivity has recently been overcome by the production of transgenic mice that contain the early region of JCV in all cells. This portion of the DNA encodes JCV T-antigens. These mice display a dysmyelinating phenotype, the severity of which is related to the level of JCV early region expression in brain. With the use of immunocytochemistry and in situ hybridization, we characterized morphologically myelin-specific and JCV gene expression in a severely affected strain of these mice. Our results suggest that expression of JCV T-antigens occurs predominantly in oligodendrocytes and is the primary cause of dysmyelination. Affected oligodendrocytes do not myelinate axons properly. However, they express myelin-specific genes and display some of the morphological phenotypes of early stages of myelination. A decreased ratio between levels of transcriptional and translational products of genes encoding the major structural proteins of central nervous system myelin was apparent. These results suggest that JCV T-antigens arrest the maturation of oligodendrocytes and inhibit the production of myelin. These results also demonstrate that JCV transgenic mice are a good model for investigating mechanisms of JCV-induced demyelinating lesions in progressive multifocal leukoencephalopathy.