Ids are dominant-negative helix-loop-helix (HLH) proteins that play overlapping yet distinct roles in antagonizing basic HLH transcription factors. Although Ids affect myogenesis, neurogenesis, and B-cell development, little is known about their in vivo functions in epithelia. We have examined the effects of forced expression of Id-1 in the small intestinal epithelium of adult chimeric mice. 129/Sv embryonic stem cells, transfected with DNA containing Id-1 under the control of transcriptional regulatory elements that function in all intestinal epithelial cell lineages, were introduced into C57Bl/6 (B6) blastocysts heterozygous for the ROSA26 marker. The B6 ROSA26/+ intestinal epithelium of the resulting adult chimeras produces Escherichia coli beta-galactosidase, allowing identification of this internal control cell population. Chimeras produced from nontransfected embryonic stem cells served as additional controls. Immunohistochemical studies of the control chimeras indicated that the small intestinal epithelium supports a complex pattern of endogenous Id expression. Id-1 is restricted to the cytoplasm; levels do not decrease as descendants of multipotent intestinal stem cells differentiate. Id-2 and Id-3 are only detectable in nuclei; levels increase markedly as epithelial cells differentiate. Forced expression of Id-1 in the 129/Sv epithelium results in a decline in Id-2 and Id-3 to below the limits of immunodetection. A subset of chimeric-transgenic mice lacked growth factor- and defensin-producing Paneth cells in their 129/Sv epithelium and also developed intestinal adenomas. These changes were not present in normal control chimeras. Adenomas were composed of proliferating beta-Gal-positive and -negative epithelial cells, suggesting that they arose through cooperative interactions between 129/Sv(Id-1) and B6 ROSA26/+ cells. These chimeras provide a model for studying how perturbations in Id expression affect tumorigenesis.