Objective: Stromal cell-derived factor-1 (SDF-1/CXCL12), the main ligand for CXCR4, is overexpressed in human cancer. This study addressed the precise contribution of SDF-1 to gastric carcinogenesis. Design: SDF-1 transgenic mice were created and a Helicobacter-induced gastric cancer model was used in combination with H/K-ATPase-IL-1β mice. Gastric tissue was analysed by histopathology and cells isolated from the stomach were analysed by molecular biological methods. Results: Analysis of the H/K-ATPase/SDF-1 transgenic (SDF-Tg) mice showed that SDF-1 overexpression results in significant gastric epithelial hyperproliferation, mucous neck cell hyperplasia and spontaneous gastric dysplasia (wild-type mice 0/15 (0%) vs SDF-Tg mice 4/14 (28.6%), p=0.042, Fisher exact test) but has minimal effects on inflammation. SDF-Tg mice also showed a dramatic expansion of α-smooth muscle actin-positive myofibroblasts and CXCR4-expressing gastric epithelial cells in the progenitor zone, both of which preceded the development of significant gastritis or dysplasia. Gremlin 1-expressing mesenchymal stem cells, the putative precursors of myofibroblasts, were also increased within the dysplastic stomachs of SDF-Tg mice and showed chemotaxis in response to SDF-1 stimulation. SDF-1 overexpression alone resulted in minimal recruitment of haematopoietic cells to the gastric mucosa, although macrophages were increased late in the disease. When SDF-Tg mice were crossed with H/K-ATPase-IL-1β mice or infected with Helicobacter felis, however, there were dramatic synergistic effects on recruitment of bone marrow-derived cells and progression to preneoplasia. Conclusion: Activation of the SDF-1/CXCR4 axis can contribute to early stages of carcinogenesis primarily through recruitment of stromal cells and modulation of the progenitor niche.