Overexpression of ErbB-2 in the basal layer of biliary tract epithelium led to the development of gallbladder adenocarcinoma in 100% of transgenic mice by 3 months of age. In addition, tumors developed in other parts of the biliary tree (e.g., cholangiocarcinoma). Adenocarcinoma of the gallbladder appeared to arise via a stepwise process involving hyperplasia, adenoma formation, and then adenocarcinoma formation. Increased ErbB-2/epidermal growth factor receptor heterodimer formation, activation of mitogen-activated protein kinase, and up-regulation of cyclooxygenase-2 levels (mRNA and protein) were observed in gallbladder epithelium of these mice. These mice represent a unique new animal model for studying biliary tract carcinogenesis.