Gene amplification is characteristic of tumors and continuous cell lines but not of primary, normal, diploid, senescing cells. However, the rat cell line REF52, which resembles primary cells in requiring expression of cooperating oncogenes for transformation, is unusual among cell lines as it is not permissive for amplification. REF52 cells did not form colonies in N-(phosphonacetyl)-L-aspartate (PALA), a drug for which the only known mechanism of resistance is amplification of the carbamoylphosphate synthetase/aspartate transcarbamoylase/dihydroorotase (CAD) gene. Colonies did form in a low concentration of methotrexate but did not contain amplified dihydrofolate reductase genes. Expression of two cooperating oncogenes in REF52 cells converted them to a state permissive for amplification. Cells expressing only the 12S E1A mRNA of adenovirus 5 did not give rise to PALA-resistant colonies, but expression of an activated ras gene together with E1A readily allowed the cells to form resistant colonies in which the CAD gene was amplified. Cells expressing E1A plus ras were fully transformed, but expression of simian virus 40 large tumor antigen alone converted REF52 cells to a state permissive for amplification without transforming them fully. The ability to manipulate gene amplification in REF52 cells by expression of oncogenes should contribute to an understanding of the nature of the permissive state.