The expression of retrovirus genes varies from one species of host to another and is probably regulated by cellular mechanisms. Thus, avian fibroblasts infected with avian sarcoma virus (ASV) produce virus and acquire a neoplastic phenotype, whereas ASV-infected mammalian (cells produce little or no virus and only rarely become neoplastic. We have explored the origins of these variations by analysing the viral DNA and RNA in several lines of mammalian cells infected by ASV. Our work was facilitated by recently developed techniques that permit the fractionation, detection and characterization of extremely small quantities of viral nucleic acids. Each line of ASV-infected mammalian cells contained either one or two copies of ASV provirus. Nevertheless, the amounts of stable viral RNA produced in these cells varied over a range of at least 100-fold. In permissive chicken cells, the four genes of ASV ( gag, pol, env and src) appear to be expressed by means of three viral messenger RNAs ( gag/ pol, M r 3.3 × 10 6; env, M r 1.8 × 10 6; and src, M r 1.1 × 10 6). The same viral mRNAs were found in ASV-transformed mammalian cells, although the relative amounts of the three species were different; the gag/ pol mRNA predominated in permissive cells, the src, mRNA in mammalian cells. The previous description of these RNAs was revised by demonstrating that the src mRNA apparently contains a 5′ untranslated region composed of two distinct elements: a nucleotide sequence transposed from the 5′ end of the viral genome, and a nucleotide sequence contiguous to the 5′ boundary of src in the viral genome. We encountered several novel forms of viral mRNA: two distinctive src mRNAs in the same clone of cells; an env RNA appreciably larger than usual; and two mRNAs that appear to be encoded by the extreme right-hand end of the ASV provirus and adjacent cellular DNA. The first of these anomalies persisted when virus was rescued from the mammalian cells and then propagated in permissive cells, whereas the second and third anomalies were not apparent during the replication of rescued virus. Viral gene expression was attenuated in ASV-infected hamster cells that had reverted from a transformed to a normal phenotype: in particular, the amount of src mRNA was reduced by almost 100-fold. The revertant cells and their transformed siblings contained single identical proviruses located at apparently identical sites within the host genome. Thus, the change in viral gene expression that accompanies and perhaps causes reversion is not due to either translocation of the provirus or independent origins of the cell lines. We conclude that the enzymatic mechanisms for the genesis of ASV mRNAs are widely distributed among vertebrates: in particular, phylogenetically disparate host cells may utilize the same signals within the ASV genome for the splicing and polyadenylation of viral RNA: even anomalous signals can be interpreted identically across a broad phylogenetic range. However, the regulation of these mechanisms varies from one cell to another, and consistent differences may occur in the maturation of viral RNA within individual clones of transformed cells. In at least some instances, transcription may be initiated within the ASV provirus but continue uninterrupted into adjacent cellular DNA; thus, the mere insertion of viral DNA into the host genome might induce the expression of previously silent cellular genes. Attenuation of viral gene expression by the host cell can lead to reversion of the cell from a transformed to a normal phenotype. Our data indicate that the host modulates ASV gene expression principally by regulating the production of viral mRNAs. but the mechanism of this regulation remains to be elucidated.