We report here the development of a rapid and quantitative method for measuring in vitro T cell transformation by human T cell leukemia viruses type I (HTLV-I) and type II (HTLV-II). This method is based on our finding that cocultivation of lethally irradiated HTLV-producing cells with peripheral blood lymphocytes (PBLs) preactivated for 24 hours with phytohemagglutinin and interleukin-2 (IL-2) induces colony formation in methylcellulose-containing medium. Colonies of about 200 cells can be clearly distinguished from background aggregates within four to six days after cocultivation. These colonies gradually increase in size and reach 300 to 1,000 cells within 14 days after cocultivation. Cells of these colonies were infected, as evidenced by expression of viral p19 antigen and the presence of HTLV proviral sequences. These cells proved to be transformed in terms of IL-2-independent continuous growth in liquid medium. Colony formation was found to depend in a linear fashion upon the percentage of the infected cells present in the irradiated cell population and is sufficiently sensitive to detect as few as 1% of virus-producing cells.