The endogenous Drosophila melanogaster retrovirus gypsy (mdg4) forms virus-like particles (VLPs) which are found as extracellular particles in the medium used to culture D. melanogaster cells. The D. hydei somatic cell line DH14, which does not harbour gypsy sequences, was exposed to D. melanogaster VLPs. Subsequent PCR and Southern analysis revealed that gypsy elements had penetrated into the D. hydei cells, suggesting interspecific transmission of the retrovirus. A D. hydei cell line containing gypsy sequences was established and grown in a mixed culture together with the G418-resistant D. hydei cell line DH33, and gypsy was shown to be transmitted from cell to cell. The proportion of cells carrying gypsy increased with time. The rate of gypsy invasion of the lines DH14 and DH33 was 10(-3) and 10(-2) per cell per generation, respectively. The results demonstrate the possibility of interspecific horizontal transfer of gypsy in the form of its VLPs.