Activated H-ras genes are present in a number of skin tumors induced in animals by carcinogen treatment. The involvement of the ras oncogenes in tumorigenesis was investigated in keratoacanthomas, benign and self-regressing tumors, as well as malignant squamous cell carcinomas. Both tumors were induced in rabbit ears by repeated applications of 7,12 dimethylbenz(a)anthracene (DMBA). The rabbit H-ras gene was cloned and sequenced. PCR analysis revealed that approximately 82% of the keratoacanthoma DNAs contained an A:T to T:A transversion in codon 61. The relative levels of H-ras transcript were increased in keratoacanthomas compared to normal skin and the activated allele was expressed in tumors, even during the regressing phase. Although a G:C to A:T mutation in codon 12 of the H-ras and an activated N-ras gene were found in two squamous cell carcinomas, the frequency of H-ras activation in codon 61 was much lower (40%) in the malignant tumours induced by the same carcinogen treatment. Therefore, DMBA induced at least two types of genetic lesions in this system: H-ras activation, present in most regressing keratoacanthomas, and activation of other unidentified oncogenes which may result in the development of malignant tumors. Our observations indicate that expression of an activated H-ras gene, in this system, is neither sufficient to induce a malignant phenotype nor even capable of maintaining the growth of a benign tumor and suggest that it could be involved in tumor regression.