A reproducible system has been developed for the production of transgenic plants in indica rice using Agrobacterium-mediated gene transfer. Three-week-old scutella calli served as an excellent starting material. These were infected with an Agrobacterium tumefaciens strain EHA101 carrying a plasmid pIG121Hm containing genes for β-glucuronidase (GUS) and hygromycin resistnace (HygR). Hygromycin (50 mg/l) was used as a selectable agent. Inclusion of acetosyringone (50μM) in the Agrobacterium suspension and co-culture media proved to be indispensable for successful transformation. Transformation efficiency of Basmati 370 was 22% which was as high as reported in japonica rice and dicots. A large number of morphologically normal, fertile transgenic plants were obtained. Integration of foreign genes into the genome of transgenic plants was confirmed by Southern blot analysis. GUS and HygR genes were inherited and expressed in R1 progeny. Mendelian segregation was observed in some R1 progeny.