A cell-associated herpes simplex virus type 2 found in a human prostatic carcinoma induced in vitro transformation of hamster embryo cells. The transformed cells (YW-74) have been shown to be hamster cells by karyotype analysis. Their epithelial morphology and growth pattern, which are different from the parental cell, have remained stable through cell passages. The presence of herpesvirus antigens in the transformed cells was determined by specific immunofluorescence and colony inhibition tests. Immunofluorescence staining with specific anti-herpes simplex virus type 2 serum showed an intense and distinctive nuclear and perinuclear fluorescence in about 95% of the transformed cells. In addition, exposure of these transformed cells to herpes simplex virus type 2-sensitized lymphocytes resulted in inhibition of growth and colony formation, while no effect was seen with nonsensitized lymphocytes. Both observations are consistent with the involvement of herpesvirus type 2 in the transformation event. This virus, which does not produce a lytic infection and is not found either in extracellular spaces or supernatant fluid of the transformed cell cultures, is unique in the fact that it is cell associated, noncytopathogenic, and capable of transforming cells in vitro, and its antigens are clearly demonstrated in the transformed cells.