The mouse skin multistage model of carcinogenesis is an ideal system in which to study questions related to the timing of oncogene activation and inactivation of tumor suppressor genes. A number of laboratories have shown that an early event associated with chemical initiation of mouse skin tumors involves activation of the Harvey-ras oncogene. To approach the question of timing of loss of tumor suppressor genes in skin carcinogenesis, we have utilized a model system developed by Kulesz-Martin in which cloned mouse keratinocytes were initiated with DMBA and variant clones with benign or malignant phenotypes were developed. We have generated somatic cell hybrids between the parental clone and the variants to study the potential loss of tumor suppressor activity during the progression of cells from the initiated to benign and to the malignant phenotypes. Somatic cell hybrids generated between the parental, normal cell strain (i.e., 291) and a malignant cell variant (i.e., 05), that produces moderately differentiated squamous cell carcinomas (SCCs), failed to produce tumors indicating tumor suppressor activity in the 291 cells. The 291 cells and a benign papilloma producing variant (i.e., 09) were able to partially suppress in hybrids the tumorigenicity of another malignant cell line (i.e., 03) which produces poorly-differentiated SCCs. Suppression of 03 tumorigenicity by the benign tumor cell, 09, was less than that seen with the normal cell, 291. These results indicated two potentially different suppressor activities were inactivated during progression of normal 291 to malignant 03 cells. We have also obtained evidence that constitutive AP-1 activity plays a role in the maintenance of the malignant phenotype of SCC cell lines. Two different SCC cell lines, 308 10Gy5 and PDV, demonstrate constitutive AP-1 activity. To examine the role of this activity in malignant progression, we stably expressed a transactivation deletion mutant of the human c-jun gene in these cell lines. Expression of this mutant c-jun protein blocked transcriptional transactivation of AP-1 responsive reporter CAT constructs driven by jun, human collagenase, and the mouse stromelysin promoters. These malignant cells were not only inhibited in their AP-1 transactivation response, but also in their ability to form SCCs upon s.c. injection into athymic nude mice. These results support the idea that inhibition of AP-1-mediated transcriptional transactivation is in some cases sufficient to suppress the tumorigenic phenotype of malignant mouse epidermal cells.