The neu oncogene, which is frequently activated in neuro- and glioblastomas of BDIX rats, was originally identified in the NIH 3T3 focus-forming assay. cDNA clones of the normal and transforming alleles of neu have been isolated. When these clones are inserted into the expression vector pSV2, they direct the synthesis of p185, the neu gene product. The transforming cDNA clone yields foci when transfected onto a NIH 3T3 monolayer, but the normal cDNA does not. The construction of in vitro recombinants between the normal and transforming cDNAs has allowed the determination of the mutation responsible for the activation of the neu proto-oncogene. A single point mutation changes a valine in the transmembrane domain of the predicted protein product insert to a glutamic acid. The DNAs from four independent cell lines containing activated neu oncogenes contain the identical mutation at this position.