Molecular analysis of cDNA derived from a papillary thyroid carcinoma (PTC) (follicular variant of papillary thyroid carcinoma on histology) which developed in an externally irradiated patient 4 years after exposure identified a portion of the 5' region, exons 1-3, of the rfp gene juxtaposed upstream of the fragment encoding the tyrosine kinase (TK) domain of the ret gene. The fusion gene, termed Delta rfp/ret, was the result of a balanced chromosomal translocation t(6;10) (p21.3;q11.2) confirmed by interphase FISH painting, with breakpoints occurring in introns 3 and 11 of the rfp and ret genes, respectively. Both Delta rfp/ret and reciprocal ret/rfp chimeric introns had small deletions around breakpoints consistent with presumed misrepair of a radiation-induced double-strand DNA break underlying the rearrangement. No extensive sequence homology was found between the fragments flanking the breakpoints. The fusion protein retained the propensity to form oligomers likely to be mediated by a coiled-coil of the RFP polypeptide as assessed by a yeast two-hybrid system. NIH 3T3 fibroblasts stably transfected with a mammalian expression vector encoding full-length Delta RFP/RET readily gave rise to the tumors in athymic mice suggestive of high transforming potential of the fusion protein. Thus, the Delta rfp/ret rearrangement may be involved in a causative manner in cancerogenesis and provides additional evidence of the role of activated ret oncogene in the development of a subset of papillary thyroid carcinoma.