Transgenic mouse strains carrying Moloney murine leukemia virus (Mo-MuLV) in the germ line were found to serve as rapid and quantitative models of in utero and perinatal retroviral infection for evaluating strategies of antiretroviral therapy. In these strains virus activation leads to virus expression, viral spread associated with the development of viremia, and subsequent T-cell leukemia/lymphoma. To test these transgenic strains for their usefulness in evaluating antiretroviral agents, the effect of the drug 3'-azido-3'-deoxythymidine (AZT) on the development of viremia and subsequent disease was examined. The assessment of mice for viremia at 1 month of age appeared to be the most useful assay because it was rapid and quantitative. AZT was most effective in preventing viremia in transgenic strains that activate Mo-MuLV after birth and had more variable effects in strains that activate prior to birth. However, in six of seven of the strains examined, AZT led to a marked improvement in survival and reduced the onset of T-cell leukemia/lymphoma. These results provide evidence for effective antiretroviral therapy during gestation and in the perinatal period and are of potential significance for the management of the maternal transmission of human retroviruses.