A widespread from of transglutaminase, tissue transglutaminase, has been identified in a number of mammalian cell types, both normal and transformed cells; its biological role is not well understood. We investigated the effect of experimentally induced colon cancer on transglutaminase activity in the rat. Azoxymethane (15 mg/kg for six weeks), given by a course of weekly intraperitoneal injections, produces tumors almost exclusively confined to the intestinal tract. Transglutaminase activity was assayed on tissue homogenates both during the period of treatment and, when the cancer had developed, on tumor tissue and on microscopically uninjured adjacent tissue. A transient proliferative phase was present in the intestine during azoxymethane treatment: in this phase we found a coincidentally increased transglutaminase levels. Transglutaminase activity in tumors of both small and large intestine was significantly higher than in adjacent tissue. Immunohistochemistry revealed higher levels of transglutaminase in tumors, mainly localized in the extracellular matrix, than in adjacent tissues, where it was widely distributed. The present study shows that transglutaminase, besides its potential role in intracellular process during early proliferative phase of carcinogenesis, may also play an important role in matrix processing during tumor growth and differentiation.