Double transgenic mice bearing fusion genes consisting of mouse albumin enhancer/promoter-mouse c-myc complementary DNA and mouse metallothionein 1 promoter-human transforming growth factor alpha complementary DNA were generated to investigate the interaction of these genes in hepatic oncogenesis and to provide a general paradigm for characterizing the interaction of nuclear oncogenes and growth factors in tumorigenesis. Coexpression of c-myc and transforming growth factor alpha as transgenes in the mouse liver resulted in a tremendous acceleration of neoplastic development in this organ as compared to expression of either of these transgenes alone. The two distinct cellular reactions that occurred in the liver of the double transgenic mice prior to the appearance of liver tumors were dysplastic and apoptotic changes in the existing hepatocytes followed by emergence of multiple focal lesions composed of both hyperplastic and dysplastic cell populations. These observations suggest that the interaction of c-myc and transforming growth factor alpha, and possibly other combinations of nuclear oncogenes and growth factors, during development of hepatic neoplasia contributes to the selection and expansion of the preneoplastic cell populations which consequently increases the probability of malignant conversion.