Simian virus 40 (SV40)-transformed F344 rat hepatocytes were transplanted into newborn and normal and irradiated adult syngeneic F344 hosts. Three independently isolated SV40-transformed hepatocyte cell lines were inoculated s.c. into newborn syngeneic animals. One cell line, SV40hpl, produced tumors in two of 12 animals. Fixed tissue sections indicated that the tumors were relatively undifferentiated but had some epithelial cells and contained a peripheral mononuclear leukocyte infiltrate. Serum from a tumor-bearing animal tested by immunoprecipitation demonstrated antibodies to SV40 large-T- but not to small-t-antigen. A portion of one of the tumors was used to prepare the tumor cell line SV40hpl-1, which was 100% positive by immunofluorescence for SV40 nuclear T-antigen. In adult F344 rats subjected previously to whole-body irradiation, inoculation of SV40hpl-1 cells produced tumors in 83% of the animals. Continued passage of the tumor cell line in irradiated rats produced a tumor in one animal which paralyzed its host. The cell line derived from this tumor (SV40hpl-1-T1-2) was tumorigenic in nonirradiated adult hosts. The tumor cell lines were morphologically similar to each other but different from the SV40hpl-transformed cell line; the tumor cells contained less cytoplasm and grew to high densities in strings or multilayered foci without covering the dish surface. All tumor cells retained SV40 antigen expression, and at least one complete copy of the virus genome was retained through two passages in animals. We concluded that SV40 transformation of rat hepatocytes can produce a tumorigenic cell line. We have shown previously that SV40-transformed hepatocytes retain the ability to express proteins characteristic of adult differentiated liver. Development of this model system will enable us to examine expression of these proteins not only in transformed cells with tumorigenic potential but also in tumor tissue and transplantable tumor cell lines.