The B95-8 strain of Epstein-Barr virus (EBV) induced colony formation of human umbilical cord-blood leukocytes in soft agar medium. One-hit response relationship between the number of colonies and the virus dose was observed with high dilutions of the virus preparation. However, there was a presumed cell-killing effect with low dilutions of virus. The colonies were similarly induced, but with a lower efficiency, in adult peripheral blood leukocyte cultures infected with the virus. The colony-forming activity of EBV was neutralized by anti-EBV-positive but not by negative human sera. The cells in colonies were capable of growing continuously and carried EBV-associated nuclear antigen. Thus, it was evident that the colony formation was caused by clonal transformation by EBV.