The retrovirus mouse mammary tumor virus (MMTV) 3' long terminal repeat (LTR) contains an open reading frame (ORF) for a 36-kDa protein and encodes a superantigen activity [pORF(sag)]. We have tested the potential oncogenic activity of pORF(sag) in two immortalized mouse mammary epithelial cells. We subcloned MMTV LTR ORF DNA into the pRc/CMV mammalian expression vector in order to place LTR ORF transcription under the control of the constitutive CMV promoter. Mouse mammary epithelial cell lines TM3 and FSK7e4 were transfected and G418-resistant cell clones were isolated. Reverse transcription-polymerase chain reaction and Northern blot analyses revealed modest overexpression of LTR RNA in several transfected cell clones of each line. Individual cell clones were transplanted into cleared mammary gland fat pads of syngeneic BALB/c mice. The parental cell lines and FSK7e4-derived clones did not form tumors, whereas ORF-transfected clones derived from the TM3 cells formed tumors within 8 weeks in 100% of transplanted fat pads in multiple experiments. The tumor cells expressed exogenous LTR ORF RNA and were proven to be derivatives of TM3 cells based on a marker p53 mutation. Immunohistochemistry using a polyclonal antiserum raised against pORF(sag) expressed in insect cells revealed a cytoplasmic reaction in TM3-CMV-LTR tumor cells; a much weaker cytoplasmic reaction was detected in the transfected tissue culture cells. These observations suggest that MMTV pORF(sag) may act as an oncogene in certain mouse mammary epithelial cells and raise the possibility that pORF(sag) may have a role in mammary tumorigenesis. As the parental FSK7 cell line has produced only ductal outgrowths upon transplantation in vivo and the TM3 cell line produces a nontumorigenic hyperplasia, the results suggest further that pORF(sag) may influence the latter stages of mammary tumorigenesis, namely, the preneoplastic to neoplastic transformation.