A new method is developed for estimating rates of somatic mutation in vivo. The stop-enhanced green fluorescent protein (EGFP) transgenic mouse carries multiple copies of an EGFP gene with a premature stop codon. The gene can revert to a functional form via point mutations. Mice treated with a potent mutagen, N-ethyl-N-nitrosourea (ENU), and mice treated with a vehicle alone are assayed for mutations in liver cells. A stochastic model is developed to model the mutation and gene expression processes and maximum-likelihood estimators of the model parameters are derived. A likelihood-ratio test (LRT) is developed for detecting mutagenicity. Parametric bootstrap simulations are used to obtain confidence intervals of the parameter estimates and to estimate the significance of the LRT. The LRT is highly significant (alpha < 0.01) and the 95% confidence interval for the relative effect of the mutagen (the ratio of the rate of mutation during the interval of mutagen exposure to the rate of background mutation) ranges from a minimum 200-fold effect of the mutagen to a maximum 2000-fold effect.