A cleavage map of the Moloney murine sarcoma viral DNA was constructed and compared with that of a spontaneously occurring deletion mutant. By restriction enzyme analysis, it was shown that a region encompassing over 40% of the viral information was not essential for transformation or rescue of the deletion mutant. The transforming region was further localised by analysis of the transforming activity in tissue culture of isolated restriction fragments of linear duoble-stranded sarcoma viral DNA. In each case, DNA fragments that retained transforming activity preserved the cell-derived insertion sequences of the viral genome. Moreover, such transformants invariably expressed RNA specific to this region. By these two approaches, it was possible to demonstrate that the transforming region of the viral genome begins very near or within the cell-derived insertion sequences. Thus, the transforming gene of this mammalian sarcoma virus originates from within the mouse cell genome.