Aflatoxin B1-2,3-dichloride (AFB1-Cl2) was synthesized as a model for the probable ultimate carcinogen, aflatoxin B1-2,3-oxide. As expected for aflatoxin B1-2,3-oxide, AFB1-Cl2 has an electrophilic carbon 2; it decomposed in water (half-life of 0.5 min in 10% dimethyl sulfoxide, pH 7.4) with the formation of 3-chloro-2,3-dihydro-2-hydroxyaflatoxin B1 and 2,3-dihydro-2,3-dihydroxyaflatoxin B1. AFB1-Cl2 formed covalent adducts with DNA and RNA with retention of one-half of the chlorine; the major products apparently contained glycosidic bonds between carbon 2 of the aflatoxin residues and nitrogen or oxygen atoms in the nucleic acids. Polyguanylic acid was the most reactive homopolymer toward AFB1-Cl2. AFB1-Cl2 was less reactive toward mononucleotides than toward polynucleotides. The major adducts formed on incubation of AFB1-Cl2 with protein contained little chlorine and could have resulted from alkylation of primary amino groups or from reactions with the hydrolysis products. Similarly, incubation of AFB1-Cl2 with amino acids apparently resulted in Schiff base formation between primary amino groups and the dialdehyde rearrangement forms of the hydrolysis products of AFB1-Cl2. AFB1-Cl2 was much more active than aflatoxin B1 in inducing sarcomas at the s.c. injection site in rats, in the initiation of papillomas on the skin of mice, and in the induction of lung tumors in mice. AFB1-Cl2 was also highly mutagenic for Salmonella typhimurium TA 98 and TA 100. Aflatoxin B1 and its 2,3,-dihydro- (aflatoxin B2), 2,3-dihydro-2-hydroxy- (aflatoxin B2a), 2,3-dihydro-2,3-dihydroxy-, and 3-chloro-2,3-dihydro-2-hydroxy- derivatives were inactive in the mutagenicity tests; and the latter four compounds were also inactive as initiators of papillomas of the skin in mice. The structures of the macromolecular adducts of AFB1-Cl2 formed in vitro, the carcinogenicity of this electrophile, and the lack of carcinogenicity of its hydrolysis products indicate that alkylation of nucleic acids is a critical reaction in tumor induction with this carcinogen and aflatoxin B1.