Three Hodgkin-derived cell lines (L428, L540, and CO) were studied for rearrangements and expression of immunoglobulin and T-cell receptor genes, and their genotype was compared to the phenotype. As far as the genotype is concerned, all 3 cell lines have characteristics of lymphoid cells; L428 of B, and L540 and CO of T-cell origin. L428 cells have one Ig heavy chain allele rearranged to C gamma and transcribed into RNA, while the second is deleted. Furthermore, L428 cells show an unusual immunoglobulin kappa light chain gene rearrangement involving deletion of the kappa constant gene in one allele, while the remaining kappa and lambda loci are in germline configuration. L540 and CO have, in contrast to L428 cells, the immunoglobulin genes in germline and T-cell receptor genes rearranged. The T-cell receptor beta and gamma genes are rearranged in both L540 and CO, whereas a rearrangement in the alpha locus was detected in L540 cells only. RNA of the size of functional beta chain transcripts was found in CO cells and of the size of functional alpha chain transcripts in L540 cells. All 3 cell lines are classified as immature lymphoid cells with respect to the limited expression of B- and T-cell antigens, respectively, and to the incomplete expression of their antigen receptor. The immaturity of lymphoid differentiation contrasts with the expression of activation antigens, i.e. Ki-1, Ki-24, HLA-DR, and IL-2 receptor. The immaturity of the cells excludes the possibility that the cells were activated along the physiological pathway, i.e. by interaction of the cell with antigen. The results obtained on the cell lines are in accordance with in vivo studies and suggest that Hodgkin and Sternberg-Reed cells are immature lymphoid cells which are activated by a still unknown mechanism.