PHILADELPHIA -- In a laboratory at the University of Pennsylvania, Mary Avarbock carefully turns a dial while peering into a microscopelike device.

On a nearby television screen, the image of a hair-thin tube piercing the wall of a cell appears.

Within seconds, she has injected a tiny fragment of human genetic material into a fertilized mouse egg. And within 20 minutes, the egg is placed in the reproductive system of a female mouse.

If all goes well, the mouse will give birth in three weeks to an offspring vastly different from the mice that scurry about homes and barnyards.

This rodent will be a transgenic species -- a mouse with a human gene.

Avarbock works in the laboratory of Ralph L. Brinster, a Penn scientist who has done pioneering research in a rapidly growing field of genetics known as transgenesis. In his lab at Penn's veterinary school are 200 lines of genetically engineered mice he has helped create.

These animals contain some of the same genes found in humans. And they are providing scientists with a powerful new tool for developing pharmaceutical products, creating improved farm animals, learning more about human disease and unlocking the secrets of how a single cell develops into a complex plant or animal.

"Dr. Brinster has been one of the real pioneers in founding this new field of biology," said Richard Tasca, an embryologist at the National Institutes of Health. "Nobody could have imagined 15 years ago the kinds of things that he and others are doing in this field today."

Among the recent developments:

Brinster and other scientists have inserted human genes for sickle cell anemia into mice to create a species that scientists hope will serve as a valuable model for developing new treatments for the inherited blood disease, which primarily affects blacks.

Scientists at the University of Wisconsin have developed cows that produce larger quantities of milk and higher concentrations of casein, a basic ingredient in cheese.

Researchers at Integrated Genetics Inc. in Framingham, Mass., have created mice that produce tissue plasminogen activator, a human substance that dissolves blood clots.

It is now possible to insert genes, which transmit hereditary characteristics from generation to generation, from any animal into another, Brinster said.

Fragments of the human genetic code can be inserted into a bacterium, a mosquito or an alligator.

Of course, this does not mean that a mouse will turn into a person. But it does mean that in some cases an animal will have some of the same characteristics as a human.

When genes that cause human cancer have been inserted into mice eggs, scientists have created mice that develop cancer.

Through experiments on these mice, scientists hope to develop drugs that will prove valuable in treating cancer in people.

In April 1988, Harvard University obtained a patent on a mouse, containing a human gene for cancer, which is genetically predisposed to develop cancer. Du Pont Co. has been awarded the exclusive commercial rights to produce these "oncomice." (Oncology is the branch of medicine dealing with tumors.)

Similarly, the National Institute for Allergy and Infectious Diseases has developed a mouse containing the genes for the HIV virus in humans that researchers hope will prove valuable in developing treatments for AIDS.

Other researchers are using transgenic techniques to develop leaner pigs, poultry that is resistant to avian influenza, sheep with wool that is easier to wash and goats that produce valuable pharmaceutical products, such as insulin, in their milk.

Robert R. Oltjen of the U.S. Department of Agriculture believes it may eventually be possible to develop cattle with microbes that digest wood fibers in their stomachs. "If that happens, we can feed them all kinds of woody products, if we want to," he said, noting that farmers could save on feed costs.

While the potential implications of transgenic animals are vast, some scientists and philosophers say that manipulating the genes of people and animals raises thorny ethical questions.

Some fear that the practice could lead to altering the human genetic code in improper ways.

"We do not know what life is, and yet we manipulate it as if it were an inorganic salt solution," says Erwin Chargaff, an emeritus professor of biochemistry at Columbia University, who fears that scientists eventually will mass-produce human embryos for experimental purposes.

"What I see coming is a gigantic slaughterhouse, a molecular Auschwitz, in which valuable enzymes, hormones and so on will be extracted instead of gold teeth," he has written in Nature, a British scientific journal.

Brinster and many other scientists believe such fears are unfounded.

"The work being done here and across the country is important for our future. It's important for both medical progress and improving people's health," said Brinster, professor of reproductive physiology at Penn's school of veterinary medicine. "I am trying to create an understanding of biology that will help people."Brinster and a handful of other scientists created the first transgenic animals in a series of experiments published in 1980 and 1981.

But it was not until 1982, when Brinster and Richard D. Palmiter of the University of Washington in Seattle reported that they had produced transgenic mice twice the size of normal mice, that their research made front-page news around the world.

"My phone didn't stop ringing," Brinster recalled. "That was the research that catalyzed both scientific and the general public's interest in the field."

In that study, published in Nature, the scientists transplanted genes for human growth hormone into a single fertilized egg of a mouse.

The egg was inserted into the reproductive tract of a female mouse, and she gave birth to the so-called "mighty mouse."

In 1981, there were no more than two dozen researchers working in the field of transgenesis, Brinster said. Today thousands of scientists work in that discipline, conducting research at most major universities around the world.

He is using transgenic mice to conduct research on pancreatic cancer -- the nation's fifth leading cause of cancer deaths -- on neurobiology and on fundamental questions about how animals develop.

"It's an incredibly fascinating area," he said. "It is just awesome to try to understand how a single cell develops into different species."