Transplantation of spleen cells from primary reconstituted mice expressing the v-src oncogene to secondary and tertiary irradiated recipients resulted in the emergence of erythroid precursors with a transformed phenotype. When cultured in methyl cellulose, these precursors generated colonies of undifferentiated cells that could be expanded into continuously growing factor-dependent cell lines in liquid culture. All lines tested had a similar phenotype and expressed the v-src oncogene. In addition they responded to factors that regulate normal erythroid development, namely erythropoietin (Epo), interleukin-3 (IL-3), and mast cell growth factor (MGF), the ligand to the c-kit encoded receptor. When cells from one of the lines were maintained in the absence of factor, a "factor independent" subpopulation emerged that appeared to grow in an autocrine fashion. Conditioned medium from these cells stimulated their own growth as well as the growth of broad spectrum of normal precursors. Studies with neutralizing antibodies indicated that the predominant colony-stimulating factor produced by these cells is IL-3.