Using a xenotransplantation system in which immortalized nontumorigenic human bronchial epithelial cells (BEAS-2B cells) are grown in deepithelialized rat tracheas that are subcutaneously transplanted into athymic nude mice, we exposed BEAS-2B cells either to cigarette smoke condensate or to the tobacco-specific N-nitrosamine 4-(methylnitrosamine)-1-(3-pyridyl)-1- butanone. After 6 mo the carcinogen-exposed BEAS-2B cells were neoplastically transformed to invasive adenocarcinomas. Cell lines obtained from xenografts exposed in vivo to chemicals exhibited several features typical of malignant lung cancer cells, such as increased in vivo invasiveness that correlated well with enhanced type IV collagenolytic activity, resistance to serum-induced growth inhibition, and increased expression of transforming growth factor alpha and its cellular-membrane receptor. Invasiveness, similar to that seen after exposure to phorbol esters, was also detected after in vitro exposure of BEAS-2B cells to cigarette smoke condensate. Collectively, these data indicate that cigarette smoke condensate and N-nitrosamine 4-(methylnitrosamine)-1-(3-pyridyl)-1-butanone induce in vivo phenotypic changes in BEAS-2B cells similar to the progressive changes that occur during human lung carcinogenesis.