An E1B 58K mutant of adenovirus type 12 (Ad12), dl207, was constructed by the deletion of 852 base pairs in the E1B 58K coding region. The mutant could grow efficiently in 293E1 cells but not in HeLa, KB, or human embryo kidney (HEK) cells. Viral DNA replication of dl207 was not detected in HeLa and KB cells and was seldom detected in HEK cells. Analysis of viral DNA synthesis in vitro showed that the Ad12-DNA-protein complex replicated by using the nuclear extract from Ad12 wild-type (WT)-infected HeLa cells but not by using the nuclear extract from dl207-infected cells. In dl207-infected HeLa and KB cells, early mRNAs were detected, but late mRNAs were not detected. The mutant induced fewer transformed foci than the WT in rat 3Y1 cells. Cells transformed by dl207 could grow efficiently in fluid medium, form colonies in soft agar culture, and induce tumors in rats transplanted with the transformed cells at the same efficiency as WT-transformed cells. Tumors were induced in hamsters injected with WT virions but were not induced in hamsters injected with dl207 virions. The results indicate that the E1B 58K protein is required both for viral DNA replication in productive infection and for initiation of cell transformation, but not for maintenance of the transformed phenotype.