A system for tetracycline-regulated inducible gene expression was described recently which relies on constitutive expression of a tetracycline-controlled transactivator (tTA) fusion protein combining the tetracycline repressor and the transcriptional activation domain of VP16 [Gossen, M. & Bujard, H. (1992) Proc. Natl. Acad. Sci. USA 89, 5547-5551]. This system yielded only low levels of transactivator protein, probably because tTA is toxic. To avoid this difficulty, we placed the tTA gene under the control of the inducible promoter to which tTA binds, making expression of tTA itself inducible and autoregulatory. When used to drive expression of the recombination activating genes 1 and 2 (RAG-1 and RAG-2), the autoregulatory system yielded both substantially higher levels of variable (diversity) joining [V(D)J] recombination activity (70-fold on average) and inducible expression in a much larger fraction of transfected cells (autoregulatory, 90%, vs. constitutive, 18%). In addition, this system allowed the creation of transgenic mice in which expression of a luciferase transgene was inducible tens to hundreds of times the basal levels in most tissues examined. Induced levels of expression were highest in thymus and lung and appear to be substantially higher than in previously reported inducible luciferase transgenic mice created with the constitutive system. With the modified system, inducible transactivator mRNA and protein were easily detected in cell lines by RNA and Western blotting, and transactivator mRNA was detected by RNA blotting in some tissues of transgenic mice. This autoregulatory system represents an improved strategy for tetracycline-regulated gene expression both in cultured cells and in transgenic animals.