The generation of transgenic mice with mammalian genes cloned in yeast artificial chromosomes (YACs) has generated great interest in the field of gene transfer into livestock. Many of the problems associated with standard transgenesis-such as lack of crucial regulator elements and position effects related to the integration site, which lead to variation in expression levels irrespective of the dose of the transgene-have been practically overcome. The large size of YAC-derived gene constructs (in excess of 1 Mb) facilitates the presence and transfer of all elements required for the faithful regulation of a gene. With the experiments discussed in this report, we have addressed the possibility of applying the obvious advantages of YAC transgenesis to farm animals. We have generated transgenic rabbits carrying a 250 kb YAC covering the mouse tyrosinase gene by pronuclear microinjection, and thus rescued the albino phenotype of the transgenic individuals. To date, this is the first demonstration of a successful transfer of large genetic units into the germ line of farm animals. This development might improve the occurrence of transgene expression at physiological levels and specific sites in livestock. YAC transgenesis therefore will be applied in genetic engineering, for example, in the production of pharmacologically interesting proteins encoded by large gene units and generating transgenic donors for xenotransplantation. (C) 1996 Wiley-Liss, Inc.