The transplantability of myelocytomatosis MC29 virus-producing chicken cell lines BR-3 and OB-1 was examined in 1-day-old chicks. Both cell lines, derived from the chicken cell line DU249, harbor nuclear genetic markers for drug resistance. When these cells were inoculated subcutaneously in the wing web of chicks, tumors developed at the site of injection in 65% of the cases. Propagation in culture of cells obtained by dispase treatment of the excised tumors, followed by selection for drug resistance, revealed that only a fraction of the tumors (27% and 60% for BR-3 and OB-1, respectively) resulted from the growth of the injected cells. The other tumors derive from the proliferation of host cells transformed by MC29 virus released by the injected cells. Tumor development subsequent to similar inoculation of 1-day-old chicks with cell-free virus stock further confirmed the tumorigenic capacity of MC29 at the site of injection. These results underline the need for the determination of tumor cell origin in studies using MC29-producing cell lines and highlight the advantage of using cells with drug-resistant markers for such work. In the course of this study we determined by immunohistochemical criteria, the myogenic origin of some of the virally induced tumors. This is the first report of in vivo transformation of muscle cells by MC29-containing virus stocks in the newly hatched chick.