In vitro transformation of rat urothelial cells is a multi-step process. We have used cell fusion to analyse the role of recessive events during in vitro progression of an immortal urothelial cell line. Somatic cell hybrids were made between the transformed cell line RM2T and a series of immortal urothelial cell lines, including the progenitor line RM2AD, from which RM2T was isolated. The ability to produce colonies in soft agar (anchorage independence) was used as an in vitro marker of transformation, and a series of 10 hybrid clones and 4 mass populations of hybrids were assessed for suppression of this phenotype. Hybrids between early-passage (less than passage 35, anchorage-dependent) RM2AD cells and late-passage (greater than passage 35, anchorage-independent) RM2T cells, showed suppression of anchorage independence when tested early after fusion (4/4 mass populations, 7/10 clones). This indicates that in vitro progression of this cell line is associated with loss of a function which can suppress growth in soft agar. Fusions between anchorage-independent RM2T cells and a series of other anchorage-dependent immortal urothelial cell lines generated hybrids which showed no suppression of anchorage independence, indicating that these anchorage-dependent cells have lost the suppressor function identified in RM2AD. Our results indicate that loss of a suppressor function can contribute to urothelial transformation in vitro and that clonal populations of immortal cells, at apparently the same stage of transformation, differ in their ability to suppress anchorage independence of the cell line RM2T. These differences provide the basis for suppressor-gene cloning experiments based on gene transfer.