The BSC/SV 40 virus carrier state was established by infecting monolayers of BSC1 cells with high concentrations of SV40. In these carrier cultures, only 4% of the cells contained intranuclear tumour (T) antigen as determined by the immunofluorescent method, but every cell produced infectious virus. During passage of the BSC/SV40 cultures, a cell line was selected in which all the cells exhibited T antigen and only 0.2–1% of the cells produced infectious virus (transformed state). The BSC1 transformed cells were like the BSC1 parent cells sensitive to challenge with heterologous viruses (attenuated polio 1, herpes simplex and vaccinia), but were resistant to superinfection by the homologous SV40. Cytosine arabinoside, actinomycin D and antiserum to SV40 inhibited virus and T antigens in the BSC/SV40 carrier cultures. In the transformed cells, infectious virus and virus antigen only were inhibited but synthesis of the T antigen remained unaffected. By cell cloning, two virus-free clones were obtained.