Liposarcoma cells from a malignant pleural effusion of a 60-year-old man with a liposarcoma on his right thigh were grown in vitro in medium RPMI-1640. Fifty-seven days after the initiation of the culture, multilayered foci of tightly packed, lipid-containing cells were scattered throughout most flasks. By electron microscopic investigation, virus particles were found budding into intracytoplasmic vesicles of cells in all foci observed, but in none of the cells between foci or in cultures before foci had formed. The particles, which acquired their outer membrane from the membrane of the vesicle, measured about 85–100 mμ in diameter and were morphologically similar to C-type viruses in various animal neoplasms. Although particles did not bud from the plasma membrane, mature virions were seen extracellularly. There were no particles found in thin sections of the original liposarcoma and infectivit of the particles could not be demonstrated.