Avian retrovirus MH2 contains two oncogenes, v-mil and v-myc. We have previously shown that a spontaneous mutant of MH2 (PA200-MH2), expressing only the v-mil oncogene, is able to induce proliferation of quiescent neuroretina cells. In this study, we investigated the transforming and tumorigenic properties of v-mil. PA200 induced fibrosarcomas in about 60% of the injected chickens, whereas inoculation of MH2 resulted mainly in the appearance of kidney carcinomas. Analysis of several parameters of transformation showed that PA200, in contrast to MH2, induced only limited in vitro transformation of fibroblasts and neuroretina cells. These results suggest that v-myc is the major transforming and tumorigenic gene in MH2-infected cells. This low in vitro transforming capacity differentiates v-mil not only from other avian oncogenes, but also from the homologous murine v-raf gene.