Primary rat embryo cells were transformed by adenovirus 1. The transformed cells formed foci of multilayered growth in monolayer cultures; cell lines were derived from such foci. A virus stock containing 1.1 × 109 virus particles and 1.5 × 108 p.f.u./ml. contained 2.3 × 102 focus-forming units/ml. when assayed in rat embryo cells. Approximately 4.8 × 106 total virus particles or 6.5 × 105 p.f.u. were required to induce one focus of transformed cells. The transformation rate was 0.0003% for cells exposed to about 2 p.f.u./cell. The transformed cells contained adenovirus 1 specific tumour antigens when tested by immunofluorescent and complement-fixation reactions. They also synthesized adenovirus 1 specific RNA which forms RNase-resistant hybrids with adenovirus 1 DNA.