Avian carcinoma retrovirus MH2 induces leukemia and solid tumors in chickens and transforms fibroblasts and macrophages in vitro. The genome of MH2 consists of two oncogenes, v-mht/mil and v-myc. Most of the transforming activity of MH2 is attributed to the v-myc oncogene. In contrast, the v-mht/mil oncogene alone does not induce a fully transformed phenotype of avian primary fibroblasts in vitro. It was shown previously that v-mht/mil is the avian homology of the v-raf oncogene in murine sarcoma retrovirus 3611. Because the v-raf oncogene transforms murine fibroblasts very efficiently, the present study tested the hypothesis that an extra segment in the 5' end of v-mht/mil relative to v-raf suppressed the fibroblast-transforming activity of v-mht/mil. By introducing an in-frame deletion of 195 nucleotides into the 5' end of v-mht/mil, the results demonstrate that in the presence of an inactive v-myc oncogene, the 5'-deleted v-mht/mil oncogene fails to transform chicken embryo fibroblasts. Therefore, it is likely that avian primary fibroblasts lack a cellular component that serves as a critical substrate/target for v-mht/mil-induced cellular transformation.