Indications of possible health effects of residue organics in drinking water have been sought using short-term tests of mutagenic and transforming activity. Ten percent or less of the total organic material in drinking water has been identified; the remainder is believed to include thousands of unknown nonvolatile compounds. Residual organics were concentrated from drinking water from representative U.S. cities by reverse osmosis followed by liquid-liquid extraction [yielding the reverse osmosis concentrate-organic extract (ROC-OE) fraction] and sorption-desorption on XAD-2 resin. Samples of these residue organics were provided by the Environmental Protection Agency for bioassay. They were examined for mutagenic activity by using Salmonella tester strains (primarily TA98 and TA100) and for transforming activity by using mouse fibroblasts (BALB/3T3 clone 1-13). City-specific patterns of dose-dependent bacterial mutagenesis and of bacterial toxicity were observed for these samples and for subfractions generated by sequential extractions with hexane, ethyl ether, and acetone. Mutagenic effects were essentially independent of a microsome activation system prepared from liver of Aroclor 1254-induced rats. On the basis of strain-specific effects in mutagenesis and differential distributions of mutagenic activity during liquid-liquid extraction, at least some of the active compounds are thought to be acidic, frameshift mutagens. The ROC-OE fraction of a New Orleans sample transformed BALB/3T3 cells in replicate experiments. By comparison with the bacterial mutagenesis data, cell transformation is a relatively sensitive method for detecting possible mutagenic and carcinogenic activity in this sample. The appropriateness of these systems for the assay of complex mixtures and the degree to which reverse osmosis concentrates contain the unaltered organic compounds in the original samples are discussed.