A clonal rat fetal liver cell line that expresses the functions of differentiated liver cells under controllable conditions has been established. Normal fetal liver cells were transformed by a temperature-sensitive A (tsA) mutant (tsA209) of simian virus 40. At the permissive temperature (33 degrees C), the tsA209-transformed liver cell line (RLA209-15) can be cultured indefinitely and cloned readily. The RLA209-15 cells were temperature sensitive for maintenance of the transformed phenotype. These transformed liver cells selectively lost four characteristics of the transformed phenotype at the restrictive temperature (40 degrees C): generation time of the cells increased, the saturation density decreased, the efficiency of growth on nontransformed cell layers decreased, and the ability to clone in soft agar was lost. The transformation can be reversed simply by a shift in temperature. RLA209-15 fetal liver cells synthesized alpha-fetoprotein albumin, and transferrin. At 33 degrees C, the levels of these liver proteins were relatively low. At 40 degrees C the transformed phenotype was lost and the levels of alpha-fetoprotein, albumin, and transferrin were greatly increased. At the restrictive temperature, maximal induction of the synthesis of alpha-fetoprotein, albumin, and transferrin was achieved 3-4 d after the upward shift in temperature. The synthesis of alpha-fetoprotein then decreased; the synthesis of albumin and transferrin, however, was maintained. A second phase of albumin and transferrin synthesis was observed in all cultures after 6 d or more at 40 degrees C. Alpha-Fetoprotein, albumin, and transferrin secreted by RLA209-15 cells were immunologically indistinguishable from authentic alpha-fetoprotein, albumin, and transferrin, respectively. RLA209-15 cells, like primary cultures of hepatocytes and a simian virus 40 tsA255-transformed fetal liver cell line (RLA255-4) reported earlier from this laboratory, responded to glucagon with markedly elevated levels of cyclic AMP. Thus, it appears that glucagon receptors characteristic of hepatocytes are retained in the simian virus 40 tsA-transformed fetal liver cells.