Malignant mouse teratocarcinoma (or embryonal carcinoma) cells with a normal modal chromosome number were taken from the "cores" of embryoid bodies grown only in vivo as an ascites tumor for 8 years, and were injected into blastocysts bearing many genetic markers, in order to test the developmental capacities, genetic constitution, and reversibility of malignancy of the core cells. Ninety-three live normal pre- and postnatal animals were obtained. Of 14 thus far analyzed, three were cellular genetic mosaics with substantial contributions of tumor-derived cells in many developmentally unrelated tissues, including some never seen in the solid tumors that form in transplant hosts. The tissues functioned normally and synthesized their specific products (e.g., immunoglobulins, adult hemoglobin, liver proteins) coded for by strain-type alleles at known loci. In addition, a tumor-contributed color gene, steel, not previously known to be present in the carcinoma cells, was detected from the coat phenotype. Cells derived from the carcinoma, which is of X/Y sex chromosome constitution, also contributed to the germ line and formed reproductively functional sperms, some of which transmitted the steel gene to the progeny. Thus, after almost 200 transplant generations as a highly malignant tumor, embryoid body core cells appear to be developmentally totipotent and able to express, in an orderly sequence in differentiation of somatic and germ-line tissues, many genes hitherto silent in the tumor of origin. This experimental system of "cycling" teratocarcinoma core cells through mice, in conjunction with experimental mutagenesis of those cells, may therefore provide a new and useful tool for biochemical, developmental, and genetic analyses of mammalian differentiation. The results also furnish an unequivocal example in animals of a non-mutational basis for transformation to malignancy and of reversal to normalcy. The origin of this tumor from a disorganized embryo suggests that malignancies of some other, more specialized, stem cells might arise comparably through tissue disorganization, leading to developmental aberrations of gene expression rather than changes in gene structure.