Historically, fish have played significant roles in assessing potential risks associated with exposure to chemical contamination in aquatic environments. Considering the contributions of transgenic rodent models to biomedicine, it is reasoned that the development of transgenic fish could enhance the role of fish in environmental toxicology. Application of transgenic fish in environmental studies remains at an early stage, but recent introduction of new models and methods demonstrates progress. Rapid advances are most evident in the area of in vivo mutagenesis using fish carrying transgenes that serve as recoverable mutational targets. These models highlight many advantages afforded by fish as models and illustrate important issues that apply broadly to transgenic fish in environmental toxicology. Development of fish models carrying identical transgenes to those found in rodents is beneficial and has revealed that numerous aspects of in vivo mutagenesis are similar between the two classes of vertebrates. Researchers have revealed that fish exhibit frequencies of spontaneous mutations similar to rodents and respond to mutagen exposure consistent with known mutagenic mechanisms. Results have demonstrated the feasibility of in vivo mutation analyses using transgenic fish and have illustrated their potential value as a comparative animal model. Challenges to development and application of transgenic fish relate to the needs for improved efficiencies in transgenic technology and in aspects of fish husbandry and use. By taking advantage of the valuable and unique attributes of fish as test organisms, it is anticipated that transgenic fish will make significant contributions to studies of environmentally induced diseases.