We have successfully established and characterized a genetically modified pig line with ubiquitous expression of LEA29Y, a human CTLA4-Ig derivate. LEA29Y binds human B7.1/CD80 and B7.2/CD86 with high affinity and is thus a potent inhibitor of T cell co-stimulation via this pathway. We have characterized the expression pattern and the biological function of the transgene as well as its impact on the porcine immune system and have evaluated the potential of these transgenic pigs to propagate via assisted breeding methods. The analysis of LEA29Y expression in serum and multiple organs of CAG-LEA transgenic pigs revealed that these animals produce a biologically active transgenic product at a considerable level. They present with an immune system affected by transgene expression, but can be maintained until sexual maturity and propagated by assisted reproduction techniques. Based on previous experience with pancreatic islets expressing LEA29Y, tissues from CAG-LEA29Y transgenic pigs should be protected against rejection by human T cells. Furthermore, their immune-compromised phenotype makes CAG-LEA29Y transgenic pigs an interesting large animal model for testing human cell therapies and will provide an important tool for further clarifying the LEA29Y mode of action.