Transforming growth factor beta (TGF-beta) has been proposed to play a number of roles in central nervous system (CNS) development and response to injury. To test these proposals, transgenic mice were generated which overproduce TGF-beta 1 in the CNS. Surprisingly, these mice developed severe hydrocephalus and died between birth and 3 weeks of age. Ovary transplantation from an affected female founder has permitted perpetuation of one of the lines as a hydrocephalus model whose genetic defect is known. These results also demonstrate that the developing CNS is highly sensitive to TGF-beta, and suggest a role for aberrant expression of TGF-beta in the pathogenesis of developmental disease of the CNS.