Mill Hill No. 2 (MH2), an avian tumor virus, was studied for its transforming and oncogenic effects. In tissue culture it induced transformation of chicken fibroblasts and yolk sac macrophages. When injected into the chicken, the main feature of this virus was its ability to cause liver and kidney carcinoma, in addition to sarcoma. MH2-associated viruses did not transform cell cultures but were able to cause only lymphoma in the birds. Light and electron microscopy were used in a detailed histologic study of the tumors induced by MH2 virus. An unclassified round cell sarcoma was produced in soft tissues at sites of injection; there was no evidence of origin from endothelium. In the kidney, carcinomas mixed with a malignant stroma were found. Hepatocarcinomas were the dominant tumors found in the liver. The lymphomas produced by the associated virus were poorly differentiated and highly malignant. The study illustrated the highly oncogenic potential of this virus and offered a model for the analysis of the carcinogenic events in a more specific way.