The developmental control genes of the Pax family are essential for brain development. Several Pax genes are also involved in chromosomal translocations causing malignancies in humans, and Pax5 expression is deregulated in medulloblastomas. We have investigated whether Pax5 can induce tumors in the developing mouse brain. Primary mouse embryonic neuroectodermal cells were retrovirally transduced with mouse Pax5 and transplanted into the brain of syngeneic host mice. No tumors developed in 36 transplants after one year, and there were no alterations in the differentiation pattern of the neural transplants. We then generated transgenic mice expressing human Pax5 under control of the Engrailed-2 promoter, which is expressed in the cerebellar external granule cell layer and in medulloblastomas. Sustained expression was achieved in the cerebellum of transgenic animals throughout lifetime. Expression levels were similar to those observed in human medulloblastomas. Again, cerebellar morphogenesis was undisturbed, and no tumors arose. These results strongly argue against a dominant transforming activity of PAX5 in NEC and in cerebellar granule cell precursors of mice, and underline the restricted tissue-specificity of PAX5 related oncogenesis.