A culture system is described in which rat kidney proximal tubule epithelial cells (RPTE) can be prepared with good yield and high viability and grown in culture under serum-free conditions. The cells require EGF, insulin, cholera toxin and either 1% dialyzed serum or a complex of bovine serum albumin with oleic acid (BSA/OA). The cells can be maintained for long periods of time and express several markers for RPTE. The cells have both alkaline phosphatase and gamma-glutamyltransferase activity and respond to parathyroid hormone but not vasopressin. The specific activity of gamma-glutamyltransferase decreases when the cells begin to grow, but increases when they reach confluence. Extracellular calcium plays a role in the induction of gamma-glutamyltransferase in confluent cells. Cells grown in media containing low calcium, i.e. less than 0.4 mM, have reduced specific activity of gamma-glutamyltransferase. Extracellular calcium also alters the morphology of the cells in that cells grown in low calcium are single cells or loose clusters suggesting poor cell-cell contact. When the calcium is raised to 1.0 mM, the cells change their shape and organization to adopt the morphology of cells maintained continuously in 1.0 mM calcium. The cells can be passaged onto plastic surfaces which have been coated with collagen but cannot be subcultured on uncoated or serum coated plastic. This culture system will be a useful model for the investigation of renal carcinogenesis and the role of cell proliferation in that process.