Avian myeloblastosis-associated virus-induced nephroblastomas are tumors consisting mainly of mesenchymal and epithelial renal elements with variable degrees of differentiation. The spatial distribution of developmental stages reflects a gradient of differentiation from less differential structures in the periphery towards more differentiated structures in the center of the lobules formed in the nephroblastomas. These heterogenic tumors contain discrete virus-cell DNA junction fragments and are therefore clonal outgrowths of a single transformed cell. These findings support the hypothesis that a mesenchymal, nephrogenic cell residual in the postembryonic kidney is the origin of the tumor, which grows by proliferation and differentiation of this target cell. All the tumors expressed higher levels of viral genomic and env messages than nontransformed tissue from the same kidney. A screening of oncogene expression with 13 different oncogenes revealed enhanced myc levels. There was, however, no rearrangement of c-myc or of the other oncogenes detected with EcoRI-digested tumor DNAs. This suggests that there is no insertion of viral elements adjacent to a c-myc. The levels of myc expression in embryonic kidneys were as high as in the tumors. Therefore, the enhanced myc expression in nephroblastomas is a reflection of the embryonic status of the tumor rather than a newly acquired function. This finding, plus the similarity of development and morphology of nephroblastomas and embryonic kidneys, suggests that the tumors arise as a result of a deficiency in a function which turns the embryonic status off.