We demonstrated previously that carcinogen-induced neoplastic transformation of Syrian hamster embryo (SHE) cells requires multiple steps. Normal, diploid SHE cells and carcinogen-induced preneoplastic cells were transfected with different oncogenes. The normal, early-passage cells were not transformed by the v-Ha-ras or v-myc oncogenes alone, but the two oncogenes combined caused tumors in nude mice and syngeneic hamsters. Cytogenetic analysis of the ras-plus-myc-induced tumors showed a nonrandom chromosome loss (monosomy of chromosome 15) in the ras/myc tumor cells. Tumorigenicity of the ras/myc tumor cells was suppressed following hybridization with normal SHE cells; reexpression of tumorigenicity at later passages correlated with loss of chromosome 15. The hybrid cells in which tumorigenicity was suppressed still expressed the ras and myc oncogenes. An early change in carcinogen-induced neoplastic progression of SHE cells is induction of immortality. At early passages, immortal cells retain the ability to suppress tumorigenicity in cell hybrids. This ability decreases with passaging of immortal cell lines. The susceptibility of immortal cell lines to neoplastic transformation by DNA transfection with the v-Ha-ras oncogene or tumor DNA inversely correlated with the tumor-suppressive ability of the cells in cell hybrids. These observations indicate that neoplastic transformation of SHE cells involves at least three steps: (1) induction of immortality, (2) activation of a transforming gene or oncogene, and (3) loss of or inactivation of a tumor-suppressor gene.