Transformation of an established Fischer rat embryo (CREF) cell line by bovine papillomavirus type 1 (BPV-1), in contrast to transformation by type 5 adenovirus or the T24 (Ha-ras) oncogene, resulted in transformants which did not exhibit a major increase in saturation density or a decrease in 125I-epidermal growth factor binding. BPV-1-transformed CREF clones did, however, grow in agar suspension culture and were tumorigenic in both nude mice and Fischer rats. The majority of transformed clones contained multiple extrachromosomal copies of BPV DNA. One transformed CREF clone contained integrated BPV-1 DNA which underwent sequence rearrangements following tumor formation in a Fischer rat and reestablishment in cell culture. BPV copy number varied in subclones of transformants isolated from the same monolayer focus, in agar-derived subclones of the same transformed focus, in tumors and in tumor-derived BPV-transformed CREF subclones. The degree of expression of specific transformation-related phenotypes, i.e., saturation density, growth in agar, and tumorigenicity, was not correlated with BPV copy number in transformed clones. Analysis of the biological properties of tumor-derived BPV-1-transformed CREF subclones indicated that certain transformants developed a stable increase in expression of transformation-related properties, a process termed "progression." TPA did not enhance the frequency of BPV-1 transformation or BPV DNA copy number in transformed CREF cells. The present study demonstrates that the CREF- transformation system can be utilized to study the molecular basis of BPV-1 transformation and should prove useful in studying the role of specific BPV-1 transforming proteins in regulating expression of the transformed phenotype and the mechanism by which transformed cells undergo progression of the transformed state.