Nonproducer and producer RSV-transformed cells and producer nontransforming virus-infected cells harbor viral DNA specifying the respective avian tumor virus. In nonproducer Rous sarcoma cells, the residing viral DNA is linear, double-stranded and covalently linked to the chromosomal DNA. Both double-stranded and single-stranded forms of RSV DNA transfect chicken cells. The progeny virus is indistinguishable from the DNA parent with respect to the morphological, biological and antigenic properties. Unlike the DNA extracted from nonproducer RSV-transformed mammalian cells, that extracted from producer RSV-transformed chicken cells gives rise, in transfection experiments, to both sarcoma virus and its nontransforming derivative. The DNA from nontransforming virus-infected chicken cells generates only nontransforming viruses. The frequency of nontransforming virus recovery is different from that of sarcoma virus recovery, the latter being a nonlinear function of the amount of transfecting DNA, while the former may suggest a linear relationship. On the other hand, the end-point dilution of transfecting DNA for sarcoma virus recovery is approximately the same as that for nontransforming virus recovery. The following is assumed: Sarcoma viruses and nontransforming derivatives are recovered from two different species of viral DNA which carry or lack, respectively, the transforming genetic material. The size of double-stranded viral DNA is substantially smaller than 20 times 10(6) daltons. In transfection experiments, the sarcoma virus DNA is first integrated into the host cell genome before being expressed, while the nontransforming viral DNA apparently bypasses the integration step. The latter DNA generates the progeny virus when taken up, carried, and transcribed in a permissive cell.