The factors that control oncornavirus formation were analyzed in Friend leukemia cells that undergo hematopoiesis when treated with dimethyl sulfoxide. Suspension cultures of Ostertag FSD-1 cell line were found to enter a G or resting state at the end of their proliferative phase and to simultaneously cease producing helper and dependent components of Friend virus. Whereas the decline in virus production is at least 100-fold, rates of cellular RNA and protein synthesis are only slightly lower in resting than in growing cells. Both resting and growing cells contain similarly large concentrations of the viral proteins P(30) and P(12). Dimethyl sulfoxide induces hemoglobin synthesis in growing cells, but its effects on virus production appear to be indirect results of its action to inhibit cell growth and thus to delay entry of cells into the G resting state. Furthermore, variant cell lines were obtained with differing abilities to synthesize virus or hemoglobin. Some lines no longer produce infectious virus, although they all harbor murine leukemia virus genes which are expressed to varying extents. The major internal protein of these oncornaviruses, P(30), is synthesized in large amounts by all of the cell lines. These results suggest that Friend virus production is not coinduced with erythroid differentiation, as had been proposed, but rather is controlled by a cellular growth cycle.