A procedure has been developed whereby the oncogenicity of the DNA from polyoma (Py) virus and Simian virus 40 (SV40) can be tested directly by injecting recombinant DNA into newborn rodents. Injection of 0.2-2.0 micrograms of linear DNA induced the development of subcutaneous liposarcomas and fibrosarcomas at the site of inoculation. Coinjection of high-molecular-weight rat DNA as carrier had little or no effect on tumor formation but plasmids pBR322, pAT153 , and pML2 behaved as strong inhibitors. Tumor induction by injecting DNA into newborn rodents provides an in vivo equivalent to a transformation assay but appears to be a more stringent and rigorous criterion of oncogenic transformation. The oncogenic potential of Py virus in newborn hamsters could be expressed by a recombinant encoding only the middle T protein, although with average tumor latencies 5-10 times longer than those observed with wild-type Py DNA. Py middle T required the cooperation from small T to induce tumors in newborn rats. SV40 DNA was tumorigenic only in newborn hamsters. delta 2005 DNA which is unable to produce the SV40 small T antigen was much less active and required a latent period about twice that of wild-type SV40 DNA. However, its tumorigenic potential was restored by addition of the Py small T antigen gene. This indicates that Py and SV40 small T antigens are interchangeable and that they probably play an identical role in malignant transformation. Finally, evidence was provided that intermolecular recombination or recombination between DNA fragments can occur in vivo.