Nuclear extracts obtained from normal rat liver and from Morris hepatoma 3924A were fractionated by DEAE-Sephadex chromatography. The fraction eluted with 175 mM (NH4)2SO4 (DE-B), which contains greater than 90% of RNA polymerase I activity, supported accurate transcription of cloned rat rDNA. A similar fraction obtained from the cytosol had all of the factors required for rDNA transcription. However, its transcriptional activity was at most one-sixth that of the corresponding nuclear fraction, as determined by the amount of protein needed to produce a similar quantity of the transcript. Unfractionated nuclear or cytosol preparations did not yield an accurate transcript. Optimal KCl and magnesium concentrations for rDNA transcription were 60 mM and 5-7.5 mM, respectively. The extent of transcriptional activity was in the following order: hepatoma nuclear fraction DE-B greater than whole cell extract derived from rat mammary adenocarcinoma cells much greater than normal liver fraction DE-B. The hepatoma preparation produced at least 10 times the amount of transcript produced by the corresponding liver nuclear preparation. Transcriptional activity was proportional to the levels of RNA polymerase I and to the rate of rRNA synthesis in these tissues.