Oncogene transduction, the process by which a cellular gene is captured by a retrovirus was mainly described in vivo. We have developed a biological system allowing stepwise analysis of transduction mechanisms in tissue culture. Avian neuroretina (NR) cells dissected at the 8th day of embryonic development rapidly cease to divide and differentiate in culture. Serial passaging of a retrovirus that does not carry an oncogene on such cultures leads with a high frequency to the emergence of new viruses that have transduced oncogenes from the mil/raf family of serine/threonine kinases. These viruses have been selected by their ability to induce NR cell division. This experimental system allowed the isolation of the following molecular intermediates generated during the successive steps of oncogene transduction: a chimeric transcript containing viral and cellular sequences joined together by an alternative splicing mechanism; then a complete retrovirus with a 5' end identical to that of chimeric RNA; finally, a retrovirus that has acquired additional gag sequences and consequently, an increased replicative capacity. Structural analysis of these molecules led us to propose a general model for oncogene transduction in which the key step is the synthesis of chimeric RNAs. This model also explains generation of the vast majority of acutely transforming retroviruses isolated in vivo.