A modified host-mediated assay for testing mutagenicity or carcinogenicity of environmental compounds was described. It involved culturing human lymphoid cells or Chinese hamster V79 cells in diffusion chambers (DC) in mice. A chemical under test was injected into the hosts. Induction of chromosome aberrations, sister chromatid exchanges (SCE), and gene mutations at the loci of 8-azaguanine and ouabain resistance (azgr, ouar) in the target cells were used as indicators. This assay system takes into account the activation or deactivation of a substance, sensitivity, economy in time and cost, and human relevance. The growth potential of cells from ten human lymphoid cell lines and V79 cells in DC in mice were studied. Cells from three human lines failed to grow, while the other seven human lines and V79 cells proliferated well. The growth of human cells in DC in mice differed among the seven lines. For induction of chromosome aberrations, SCE and azgr or ouar mutants in the target cells in DC in mice, the following known promutagens or carcinogens were used: cyclophosphamide (Cy), ifosfamide (If), 1-(pyridyl-3)-3,3-dimethyltriazene (PyDT), dimethylnitrosamine (DMN), diethylnitrosamine (DEN), benzo(α) pyrene (BP), 7,12-dimethylbenz(α)anthracene (DMBA), and 3-methylcholanthrene (MCA). Three noncarcinogenic analogs, pyrene (Py), anthracene (An), and perylene (Pr) were used as negative controls. A dose-related increase in chromosome aberrations was observed in six human lines in DC in mice injected with various doses of Cy. A dose-dependent increase in the number of SCE/cell was observed in two human lines in DC in mice treated with Cy. For V79 cells in DC in mice, the number of SCE/cell at various doses of Cy, If, PyDT, DMN, DEN, BP, DMBA, MCA, Py, An, and Pr were examined. All substances except DEN, Py, Pr, and An caused a significant increase of SCE. Induction of azgr and ouar mutants in V79 cells in DC in mice by PyDT, Cy, and If was studied. A dose-dependent decrease in plating efficiency and a dose-dependent increase in mutation frequency were observed for all three chemicals.