Purine nucleoside phosphorylase (PNP) levels are modulated during the growth cycle of rat hepatoma cells and increase two- to three-fold as cells go from early exponential growth phase to stationary growth phase. A mutant of these hepatoma cells has been isolated which is deficient in PNP activity. Quantitative immunoprecipitation tests indicate that the decrease in enzyme activity is due to a decrease in the number of PNP molecules. The low level of PNP enzyme produced by the mutant, however, is indistinguishable from the wild-type enzyme, suggesting that the mutant may be defective in the ability to modulate PNP levels. Fusion of the mutant cells to wild-type parental cells results in hybrids that express the mutant phenotype. Segregants that arise from the hybrids show chromosome loss and reexpression of the wild-type parental phenotype, the mutant parental phenotype, and a 2S wild-type phenotype. These indicate the following about the defect in modulation in the mutant PNP-100: (1) it is trans dominant to the wild-type; (2) its effect is negative; (3) some genomic element is required for its continued effect; and (4) it does not act by obliterating its functioning counterpart in hybrid cells.