A spontaneously transformed pulmonary embryonic rat epithelial cell line (PER) is described in terms of growth, tumorigenicity, growth factor responsiveness and biosynthetic capacity. At low-passage subcultures, PER cells grew as a monolayer and did not form colonies in soft agar. After long-term subcultivation, they lost contact inhibition, became anchorage-independent and formed tumours in nude mice. Low concentrations of foetal calf serum permit the maximum growth rate. The multiplication and metabolic activity, assessed by 2-deoxy-D-glucose uptake, was significantly stimulated by growth factors. PER cells synthesized collagen types I, III, IV and V, laminin and fibronectin, and organized a pericellular matrix made up of only basement membrane components (type IV collagen and laminin) and fibronectin. These data enabled us to define PER cells as a transformed epithelial cell line evolving towards malignancy with long-term subcultivation. These cells appeared to be a valuable tool in studies of tumour cell-matrix interactions and regulation of growth factor receptors in tumorigenesis.