K-104 cells, a cloned cell line derived from a human neuroblastoma (SYM-I), were induced by rabies HEP-Flury virus to release large amounts of interferon, and the resulting antiviral activity significantly suppressed the rabies virus replication. The role of endogenous interferon was confirmed by treatment with anti-interferon antibody which increased the yield of progeny virus. The virus yield in the second undiluted passage through K-104 cells was much less than that in the first passage, because of the antiviral state initiated by brief contact of interferon present in the virus inoculum with cells during the short period of virus adsorption. When the m.o.i. was relatively low, as in the third undiluted passage, the effect of interferon present in the inoculum was enhanced and most of the infected cells survived but were shown to be in a state of persistent infection. Defective interfering (DI) particles did not accumulate rapidly during these three undiluted passages. When Sindbis virus was used for infection, the endogenous interferon system of K-104 cells was not activated during 12 undiluted passages. However, on the 12th passage, the yield began to decline due to the generation and accumulation of DI particles.