Differentiated rat thyroid cells, designated FRTL, are totally dependent on TSH for their growth. We continuously cultured FRTL cells in the absence of TSH and found that another type of cell appeared in the culture. The new cells were large, flattened and epithelial-like, and none of them exhibited thyroglobulin immunoreactivity. Since they grew independently of TSH, we further cloned these mutated cells by the limited dilution method in the absence of TSH. cAMP production in the cloned cells (FRTL-Tc) was stimulated dose-dependently by TSH. The TSH concentration that produced a maximal level of cAMP in FRTL-Tc cells was 1 order of magnitude higher than in FRTL cells. A [125I]TSH binding study confirmed that the FRTL-Tc cells had TSH receptors with the same binding capacity but a higher Kd than those of FRTL cells. A [125I]cyanopindolol binding study revealed that the FRTL-Tc cells had acquired beta 2-adrenergic receptors and that isoproterenol or epinephrine could stimulate cAMP production in the cells. TSH or beta-adrenergic agonists inhibited the growth of these cells, as did (Bu)2cAMP. When FRTL-Tc cells were transplanted into the sc tissue in Fisher rats, they grew as a tumor in all of the animals (n = 10). Metastasis of the tumors to the lung and liver occurred. These results indicate that FRTL-Tc cells are malignantly transformed cells with TSH receptors derived from thyroid epithelial cells and also suggest that the role of cAMP in the proliferation of the transformed cells might be different from that in normal cells.