Eight cell lines exhibiting resistance to Ca2+ induced terminal differentiation were derived from primary mouse epidermal cultures and their properties analyzed. The lines developed either spontaneously (2 lines) or after exposure of primary cultures to carcinogens or carcinogens and tumor promoter. All but one of the lines were of epithelial or epitheloid morphology but 3 of the 8 lines lacked desmosomes, keratin filaments and immunoprecipitable keratin proteins, and thus could not be defined as keratinocytes. Two of the 5 keratinocyte lines were tumorigenic in syngeneic Balb/c newborns after 4 months in medium containing 1.2 mM Ca2+, and 3 lines remained non-tumorigenic even after 11 months in 1.2 mM Ca2+. All three of the non-keratinizing lines were tumorigenic. Tumorigenic potential of the 5 keratinocyte lines did not correlate with ploidy (as determined by DNA content), transglutaminase activity or growth in soft agar. However, the 2 tumorigenic keratinocyte lines contained cells which stained intensely red for gamma glutamyl transpeptidase activity, while the non-tumorigenic keratinocyte lines did not. Only those lines lacking desmosomes and keratin filaments grew in soft agar, but these lines were negative for gamma glutamyl transpeptidase activity. Ploidy and transglutaminase activity did not correlate with tumorigenicity in these non-keratinizing lines. These results show that cell lines derived from cultured mouse epidermal cells and selected on the basis of their resistance to Ca2+ induced terminal differentiation may be preneoplastic. Furthermore the association of additional markers with malignant change in these cell lines depended on whether or not the cells were keratinizing.