The susceptibility of T and B lymphocytes to productive infection and transformation by murine leukemia virus Moloney was determined by enumeration of cells producing infectious virus after in vitro infection of mitogen-stimulated, isolated cell populations and by in vivo infection of euthymic BALB/c and thymus-deficient (nude) mice. Our in vitro results demonstrated that the majority of splenic T cells and thymocytes are resistant to productive infection in vitro; a specific subpopulation of susceptible nylon-adherent splenic T cells was identified, however. Similarly, surface immunoglobulin-positive B cells also represent susceptible targets in vitro; mature B cells, however, did not represent the principal target for transformation in the in vivo experiments. Infected euthymic mice expressed increasing titers of murine leukemia virus and uniformly developed fatal T-cell lymphomas at 10 to 12 weeks postinfection; nude mice, in contrast, maintained high, stable levels of viremia throughout the 28 weeks of observation. Infected nude mice remained free of malignancy or developed either granulocytic leukemias or, in one case, reticulum cell sarcoma. Collectively, the results indicate that while the majority of T cells are resistant to productive infection, they represent the principle targets for transformation; B cells, however, represent permissive targets for virus replication, but are resistant to transformation.