Papillary differentiation is one of the most common histological features of ovarian cancer, although the underlying mechanism that leads to such differentiation is not known. We hypothesized that human ovarian surface epithelial cells can be transformed into carcinoma with papillary differentiation by overexpressing HER2/neu in these cells. Mice were injected either subcutaneously or intraperitoneally with two immortalized human ovarian surface epithelial cell lines after enforced expression of HER-2/neu. Mice subcutaneously injected with tumor cells from either the T29Nt or T80Nt developed undifferentiated carcinomas. In contrast, mice injected intraperitoneally with T29Nt cells developed papillary carcinoma, and those injected intraperitoneally with T80Nt cells developed undifferentiated carcinoma. Our results demonstrate that ovarian surface epithelial cells can develop into papillary carcinoma in mice, and that the induction of papillary differentiation depends not only on specific genetic modifications but also on the tumor microenvironment and epithelial cell type from ovary from different patients.