The evolution of a fully malignant tumor is a multistep process resulting from the action of multiple factors, both environmental and endogenous, and involves alterations in the function of multiple cellular genes. Chemical carcinogens that initiate this process appear to do so by damaging cellular DNA. In addition to producing simple point mutations, this damage appears to induce the synthesis of a transacting factor that can induce asynchronous DNA replication. This response may result in gene amplification and/or gene rearrangement. This phenomenon may also play a role in synergistic interactions between chemicals and viruses in the causation of certain cancers. The primary target of the tumor promoters TPA, teleocidin, and aplysiatoxin appears to be cell membranes. All three of these agents act, at least in part by, enhancing the activity of the phospholipid-dependent enzyme PKC. We have proposed a stereochemical model to explain the interaction of these amphiphilic compounds with the PKC system. We have found that TPA and teleocidin markedly enhance the transformation of C3H10T1/2 mouse fibroblasts when these cells are transfected with the cloned H-ras human bladder cancer oncogene. Thus, tumor promoters can act synergistically with an activated oncogene to enhance cell transformation. Furthermore, carcinogen-transformed rodent cells display aberrations in the expression of various endogenous retrovirus-related sequences. Activation of some of these sequences may lead to insertion mutations and further aberrations in gene expression. These findings are discussed in terms of a multistep model that involves progressive changes in cellular oncogenes and aberrations in the function of DNA transcription enhancer sequences. It will be of interest to determine to what extent these concepts apply to the etiology of cancers of the respiratory tract.