Two types of hybrids between cells with erythroid phenotype (Friend cells) and teratocarcinoma cells can be distinguished: cell hybrids with an erythroid phenotype, which release or can be induced to release large amounts of Friend spleen focus-forming virus (F-SFFV) on exposure to bromodeoxyuridine and cell hybrids with a teratocarcinoma phenotype, which do not release Friend virus and are not inducible for F-SFFV release. In this paper, we attempted to relate these differences to the expression of F-SFFV and Friend murine leukemia virus (F-MuLV) functions. Teratocarcinoma phenotype hybrids retained F-SFFV-and F-MuLV-related provirus sequences. They did not express F-SFFV- or F-MuLV-related RNA or proteins. The hybrids differentiated to endoderm-like cells on exposure to retinoic acid or hexamethylene-bis -acetamide. These cells, in contrast to the teratocarcinoma phenotype (uninduced) cells expressing SSEA-1-like antigens, did not express SSEA-1-like antigens; they formed typical, prekeratin-staining cytoskeletal structures and could be induced to release mouse interferon. The differentiating cells, but not the uninduced teratocarcinoma hybrids, were infected productively with F-MuLV or the F-MuLV--F-SFFV complex. They, however, did not express endogenous F-SFFV. Endogenous F-SFFV functions could not be rescued by infection with F-MuLV. Induction of teratocarcinoma hybrids with retinoic acid did not activate endogenous F-MuLV or F-SFFV transcription or protein synthesis. These data demonstrated two control mechanisms of Friend virus repression: one which acted trans during formation of the cell hybrids and was maintained only in teratocarcinoma phenotype cells and the other which acted cis and was still operative during induction of endodermal differentiation.