The organization of viral DNA sequences in several cell lines derived from a primary colony of simian virus 40 (SV40)-transformed mouse cells was analyzed to examine the origin of the various distinctive patterns of SV40 sequence arrangement present in transformed cells. This analysis revealed a complex arrangement of viral sequences in the uncloned transformed cells but simplified arrangements in cloned derivatives of the primary transformant. The cell lines studied had certain SV40 sequence arrangements in common, but the cloned lines had lost some parental arrangements and acquired new arrangements. These results indicate that the arrangement of viral sequences in some SV40-transformed cells is not fixed but that alterations occur after integration, creating a heterogeneous population of transformants. In the process, expression of viral genes may be altered. Possible causes for and implications of this genetic instability are discussed.