Cell lines that no longer require exogenous interleukin 3 (IL-3) for growth were isolated from an IL-3-dependent cell line that possesses characteristics of early lymphoid cells. Unlike the parental cells (FL5.12), these autocrine transformed lines (FL-IL3-R) constitutively secreted IL-3, were rearranged at the IL-3 locus and formed tumors upon injection into syngeneic mice. The rearrangement and IL-3 expression resulted from the transposition of an intracisternal A particle (IAP) provirus into the 3' untranslated region of the IL-3 gene. This region contained ATTTA sequence motifs that have been associated with cytokine and oncogene mRNA instability. IL-3 transcripts from the autocrine transformed cell lines had a longer half-life than similar transcripts isolated from either phorbol ester-stimulated T cells or the WEHI-3B myelomonocytic cell line. IAP proviral transposition did not alter the transcription rate of the IL-3 gene in FL-IL3-R cells. Therefore, IAP proviral transposition can activate IL-3 gene expression by prolonging mRNA stability, and this mechanism can contribute to the autocrine transformation of the hemopoietic cells.