Adult AKR and C58 mice injected intramuscularly with murine sarcoma virus, Moloney isolate (M-MSV), developed high incidence of nonregressing local tumors. Histologically, these tumors revealed the typical pleomorphism of M-MSV sarcomas; in some cases, however, neoplastic tissue showed a nodular or diffuse growth of monomorphic myoblastlike cells, reminiscent of clonal aggregates. No depression of immune reactivity was found in M-MSV-injected mice as evaluated by direct hemolytic plaque-forming cells against SRBC and by virus-neutralizing antibody production. The MSV recovered from the induced tumors proved to be, by neutralization assay, a Gross (G)-MSV pseudotype. Moreover, tumor cell suspensions absorbed out cytotoxic antibody directed against G-cell surface antigens. Therefore, the conclusion was drawn that MSV with envelope characteristics of endogenous G leukemia virus had formed in vivo through a phenotypic mixing phenomenon. The failure of tumors to regress has been interpreted as mainly due to the partial unresponsiveness of host immune reactivity towards G-MuLV specified antigens. Since MSV-tumors arose in AKR mice after a very long latent period, the possibility was considered that this relative resistance might depend on immunologic mechanisms. In fact, M-MSV-injected AKR mice immunodepressed by goat antimouse lymphocyte serum or rendered partially tolerant by neonatal M-MuLV inoculation developed sarcomas with higher incidence and with a shorter latency. Furthermore, the MSV recovered from these early tumors proved to be the original Moloney pseudotype.