The carcinogenic process is extremely complex and is affected by diverse environmental and host factors. The mechanism for the gradual development of the transformed phenotype (a process termed "progression") was studied in type 5 adenovirus (Ad5)-transformed rat embryo cells. Progression was not correlated with major changes in the pattern of integration of viral DNA sequences. Instead, it was associated with an increased methylation of integrated viral sequences other than those corresponding to the E1 transforming genes of Ad5. A single exposure of progressed cells to the demethylating agent 5-azacytidine (Aza) resulted in a stable reversion to the unprogressed state of the original parental clone. A further selection of cells after growth in agar allowed the isolation of Aza-treated clones that had regained the progressed phenotype. These observations indicate that progression is a reversible process and suggest that progression may be associated with changes in the state of methylation of one or more specific genes.