raf oncogenes have been implicated in hepatic carcinogenesis. We studied the effects of the v-raf of murine retrovirus 3611-MSV on the growth and differentiation of a simian virus 40 (SV40)-immortalized rat liver cell line (ALB-8) which maintained many of characteristics of differentiated hepatocytes. Cells were co-transfected with v-raf and the neo gene followed by selection with G418 for transfectants. In culture, the expression of v-raf stimulated cell proliferation without altering cell morphology or expression of liver-specific genes: albumin, fibrinogen, alpha-1-antitrypsin and alpha-1-acid glycoprotein. The v-raf-transfected cells induced rapidly growing tumors in 100% of nude mice, while control DNA-transfected cells were only weakly tumorigenic, producing slowly growing tumors in 2/7 mice after a long latency. These slowly growing tumors were histologically moderately to well-differentiated hepatocellular carcinomas in which the liver-specific genes were highly expressed. In contrast, v-raf-induced tumors were histologically poorly differentiated and showed a dramatic decline in the expression of the liver-specific genes. In a tumor cell culture established from a v-raf-induced tumor, however, expression of the liver-specific genes was coordinately recovered. These observations indicate that v-raf is capable of inducing progression of SV40-immortalized hepatocytes into highly malignant cells and the progression is accompanied by loss, in vivo, of the hepatic differentiation.