Using repeated cloning and treatment with cis-HPL (200 micrograms/ml), an analogue of a procollagen precursor inhibitory to the growth of collagen-synthesizing cells of mesenchymal origin, clonally premature epithelial cell lines were isolated from fetal SGH lungs cultured on the 15th day of gestation. One of the cell lines, M3E3/C3, which has been extensively studied for biological characterization, developed poorly differentiated carcinomas in injected hamsters after transformation by MNNG. Moreover, when grown on collagen gel, this cell line indicated an obvious potency for in vitro differentiation in response to vitamin A by developing activated Golgi regions, well developed rER and a number of mucus-like granules. Since such a differentiative responses is expected to be definable in the light of respiratory epithelium developing in utero, this cell line may be useful for studying mechanisms of differentiation-dependent sensitivity of fetal organs to transplacental carcinogen exposure.