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If it were possible to clone in vitro cells of any type, at any stage of differentiation, from an extensively characterized animal such as the mouse, many areas of cell biology would benefit. Indeed, it would be even more helpful if these cells could subsequently be restored to their normal in vivo phenotype whenever required. Here, we describe a step on the pathway to such an idealized "clonable" mouse. In principle, it seeks to link a "universal" transforming agent to a regulatory system that is relatively simple, yet quite foreign to the mouse. A plasmid containing the bacterial lac operator/promoter region linked to the SV40 large T antigen and a vector containing the lac repressor that can be expressed in mammalian cells were coinjected into fertilized mouse oocytes utilizing the standard techniques for generating transgenic mice. Two progeny were obtained that express large T antigen in the presence, but not the absence, of the nonmetabolizable lac inducer, isopropyl-beta-thio-D-galactoside. This report characterizes fibroblast cell lines established from these transgenics that are readily transformed in vitro with isopropyl-beta-thio-D-galactoside. A significant proportion of the cells are restored to their "normal" (nontransformed phenotype) when isopropyl-beta-thio-D-galactoside is removed.