A modification to the well-known two-stage model of carcinogenesis with clonal expansion is proposed. A true stem cell is applied to the production of intermediate cells by incorporating a birth-death process with a reflecting barrier into the model. The distribution of the number of detectable intermediate cell clones is derived, and systems of differential equations are formulated for the cumulative distribution function for the appearance of malignant tumors. The model is applied to data on papilloma formation in a mouse skin painting experiment. Tests for the importance of intermediate cells in tumor incidence can be derived.