S49 mouse lymphoma cells were found to be extremely sensitive to the antiproliferative activity of interferon. These characteristics were studied to select for IFN-resistant cell variants. Some 0.6% of the parental S49 cell population were resistant to the antiproliferative and cytotoxic activities of IFN. The resistant cells were cloned and analyzed for their responses to several of the activities of IFN, namely, inhibition of encephalomyocarditis (EMC) virus, murine leukemia virus (MuLV) replications, and the induction of (2'-5') oligoadenylate synthetase. Among the clones selected some were highly resistant while others demonstrated only partial responsiveness to IFN. S49 cells demonstrate tubular structures in the cytoplasm. These structures were previously reported to be antigenically related to mouse mammary tumor virus (MMTV). We report here that IFN treatment decreases the expression of these cytoplasmic viral structures as revealed by electron microscopy. To correlate this novel antiviral activity to the more established functions of IFN we utilized the above mentioned S49 IFN-resistant variants. The anti-MMTV activity of IFN correlated with the other effects of IFN in both the highly resistant and partially responsive S49 clones. Our findings indicate that a relatively high proportion of S49 cells vary in their response to IFN. The defect in the resistant cells appears to affect a primary response to IFN which is common to its diverse activities. Furthermore, the effect of IFN on MMTV-related structures involves the usual pathway of IFN action.