A discussion of the proposition that malignant cells are permanently altered normal cells. They are new types or species of cells which after they are established breed true indefinitely in vivo and in vitro. The rat malignant cells specially referred to differ cytologically from normal cells and from one another. When cultivated in vitro they retained their special cytological characteristics and their malignancy, producing typical tumors when inoculated into rats even after serial cultivation for 1-3 yrs.