Normal cultures of epithelial appearance were initiated by trypsinization of a surgically resected, histologically normal branchial cyst. Cellular morphology was consistent with derivation from the stratified squamous epithelium of the cyst or from vascular endothelium, although electron micrographs of the cultured cells failed to show any junctional complexes. Infection with SV40 produced transformants which were also epithelioid in appearance. These grew vigorously for 22 to 50 population doublings (about 23 to 32 subcultures, depending upon regimen) and then became quiescent. During this evolution, virus was detectable at all stages by both direct isolation (cell extracts) and cocultivation with permissive cells. In two sublines in which selection for rapidly growing cell types occureed, virus was detected only by cocultivation. The work confirms that of others in the finding that normal human epithelial cells are susceptible to transformation by oncogenic viruses, but are apparently less responsive than are fibroblasts to such transforming agents. It also suggests that subcultivation techniques that maintain the populations of transformed cells at low density tend to select against cell strains that are continous producers of infectious virus.