Drug-resistant clones selected from FR3T3 rat cells after transfer of neo-BPV1 (Bovine Papillomavirus Type 1) DNA constructs became phenotypically transformed (focal transformation, growth in suspension and tumor formation) soon after selection (approximately 5 generations in culture). A frameshift mutation in ORF E5 abolished transformation, but did not prevent the autonomous maintenance of the DNA construct. A more complex situation was observed when the E2 transactivating function was abrogated. A minority of the E2(-)-neor clones became phenotypically transformed shortly after drug selection, but the majority maintained normal growth properties for 30 to 50 generations. The rate of viral transcription was uniformly high in cells which exhibited transformed growth properties early after selection (the E2- minority class and all the wild type transformants) and low in phenotypically normal cells (the majority of the E2- lines). The same low transcriptional activity and delayed expression of transformed growth properties had been observed after transfection of a similar construct carrying a wild type viral early region (69-T fragment), but lacking the late region. The elevated rate of viral transcription, which correlates with the immediate expression of transformation, appears therefore to require at least two distinct elements, the E2 transactivator function and sequences in the late region of the viral genome. In their absence, high transcription rates and transformation could be established only in a minority of the transfected clones, by an unknown, E2-independent mechanism. Evidence was obtained for a third transformation route which, in the absence of either E2 or the late region, led to the focal occurrence of transformed derivatives after 30 to 50 generations of normal growth, but was not associated with an overall increase in viral expression.