This review discusses the potential relationships between ADP-ribosylation reactions, DNA repair, cell differentiation, and cancer. ADP-ribosylation of chromatin proteins has been shown to participate in DNA excision repair in all nucleated cells. ADP-ribosylation of chromatin proteins is catalysed by nuclear ADP-ribosyl transferase (ADPRT). This enzyme is entirely dependent on DNA for its activity because it has an absolute requirement for ends or nicks in double-stranded DNA. Exposure of cells to small alkylating agents or to radiation causes a fall in cellular NAD+ levels due to a transient activation of ADPRT and a consequent ADP-ribosylation of chromatin proteins. Inhibitors of ADPRT retard DNA strand-rejoining induced by radiation or by small alkylating agents; such inhibition has at least two biological consequences; a synergistic potentiation of cytotoxicity and an enhancement of sister chromatid exchanges and chromosomal aberrations. No species differences have yet been reported; there are variations between cell types and between different damaging agents. The enzyme inhibitors do not block early steps in DNA repair, and repair synthesis does not require ADPRT activity. DNA damage increases the activity of both DNA polymerase beta and DNA ligase II. The activation of DNA ligase II can be blocked by ADPRT inhibitors; presumably ADPRT activity is required for the activation of DNA ligase II. A plausible molecular explanation for the function of ADPRT in DNA repair is that ADPRT regulates the activity of DNA ligase II, the "non-replicative" ligase. In addition to its function in DNA repair, ADPRT is an obligatory requirement in certain categories of cell differentiation. Inhibitors of ADPRT and nicotinamide starvation both reversibly block cell differentiation. We suggest that a similar mechanism to that of DNA repair may be involved because we observe 100 to 300 single-strand DNA breaks during the cytodifferentiation of primary chick myoblasts. These breaks are not due to a general deficiency in DNA repair. I suggest that in certain categories of cell differentiation there are rearrangements or transpositions within the mammalian genome, and that ADP-ribosylation reactions have a general function to be sensitive to DNA breaks and to regulate subsequent DNA ligation in DNA repair, in DNA recombination, in sister chromatid exchanges, in chromosome aberrations, in gene rearrangements, in transpositions and in certain categories of cell differentiation. The relevance of these observations and ideas to cancer is discussed.