Subgroup E avian type C viruses produced by bromodeoxyuridine-treated 100 X 7, line 7, or line C chicken cells were restricted in their intracellular growth on K28 chicken cells but not on line 15 chicken cells. Cells from embryos of line 15 chickens bred with K28 chickens did not restrict the growth of the subgroup E induced leukosis viruses (ILVs). This result indicates that the phenotype for the intracellular restriction of the growth of subgroup E ILVs found in K28 cells is recessive. Long-term growth of the subgroup E ILVs in K28 cells resulted in the appearance of subgroup E virus that grew well on K28 cells. No change in growth characteristics was observed for subgroup E ILVs grown in line 15 cells indicating that appearance of nonrestricted virus occurred only during growth of the subgrouo E ILVs on a restrictive host. RAV-0, a subgroup E virus closely related to the ilvs, had the same growth characteristics as the subgroup E ILVs. RAV-60, a subgroup E virus formed by recombination of exogenous avian leukosis virus with endogenous subgroup E virus coat information, grew well on both line 15 and K28 cells.