Over ten thousands kinds of chemical substances have been widely used for manufacture, agriculture, household and other purposes in industrialised countries. Various unintended by-products are also generated in manufacturing processes and in combustion of fossil fuel. Some of these chemicals released to the environment, e.g. into air and water, are likely to be hazardous and pose a public health concern. Regulation by Chemical Substances Control Low and PRTR systems are important frame works for managing release of hazardous chemicals to the environment in Japan. Biological monitoring is a novel methodology for assessing the health risk of exposure to environmental chemicals. Mutation is one practical endpoint for biological monitoring, whereby exposure to mutagenic chemicals may result in DNA mutations, e.g. base substitutions. Therefore, our studies have been focused on development of a bio-assay method for estimating in vivo mutagenicity of environmental chemicals, especially in ambient air. The potency of urban air for DNA adduct formation was estimated using rats maintained in a small animal facility beside a road with heavy traffic. The amount of DNA adducts in the lung was significantly elevated after a 4-week exposure, indicating that mutagenicity of urban air should be further evaluated. Diesel exhaust, a major source of mutagens in urban areas, was evaluated for in vivo mutagenicity using transgenic animals (Big Blue rat and gpt delta mouse) developed for detecting mutagens. Mutant frequency in lung of Big Blue rat was significantly increased by exposure to diesel exhaust for 4 weeks at the concentration of 6 mg SPM/m³. For detecting mutagens in water, we have developed a transgenic zebrafish line; this project is also reviewed.