The ability of cloned Rous sarcoma virus (RSV) DNA encoding the v-src oncogene to neoplastically transform normal, diploid Syrian hamster embryo (SHE) cells was examined. Transfection of RSV DNA into early passage SHE cells resulted in a low but significant number of tumors when treated cells were injected into nude mice. Tumors formed with a low frequency (two tumors out of ten sites injected) and only after a long latency period (14 weeks). In contrast to the normal SHE cells, several different carcinogen-induced preneoplastic immortal SHE cell lines were highly susceptible to transformation by the v-src oncogene to the neoplastic phenotype. Tumors formed with high efficiency and a short latency period (less than 3 weeks). Further studies were performed to determine the basis for the inefficient transformation of the normal SHE cells. NeoR clones isolated after cotransfection of SHE cells with pSV2-neo and RSV DNAs were neither morphologically altered nor immortal and did not contain detectable levels of the v-src gene product. These results suggest that neoplastic transformation by v-src DNA in the normal cells is initially suppressed. However, cells from a v-src-induced tumor expressed v-src RNA, and antibody to v-src protein precipitated from the tumor cells a 60,000-molecular-weight protein which displayed protein kinase activity. Karyotypic analyses confirmed that the tumor was derived from Syrian hamster cells and suggested that it was clonal in nature. These results indicate that the v-src oncogene was primarily responsible for neoplastic transformation of SHE cells. In contrast to the results with the v-src oncogene, our previous studies showed that v-Ha-ras oncogene alone is unable to induce neoplastic transformation of SHE cells. Furthermore, the v-myc oncogene was able to compliment v-Ha-ras to neoplastically transform SHE cells, while cotransfection with v-src plus v-myc did not increase the incidence of tumors.