We have investigated three aspects of RNA turmor virus replication and cell transformation: (1) the properties of the purified avian and mammalian viral RNA-directed DNA polumerase, (2) some characteristics of the viral 60-70S RNA genome, 30-40S RNA subunits and intracellular viral RNA species, and (3) the interaction of the viral DNA polymerase with its RNA template early during infection and cell transformation by the murine sarcoma-leukemia virus (MSV[MLV]). Avian myeloblastosis virus (AMV) contains two forms of RNA-directed DNA polymerase, alpha, consisting of a single polypeptide of molecular weight 65,000, and alphabeta, consisting of two polypeptides of molecular weights 65,000 and 105,000. The alpha and alphabeta forms of AMV DNA polymerase both possess RNase H activity that requires free end termini on the ribopolymer and can degrade the RNA of the RNA-DNA hybrid in the 3' to 5' and 5' to 3' directions. But, alpha and alphabeta possess a different mode of exoribonuclease activity. While alphabeta RNase H is a processive exoribonuclease that degrades the polynucleotide chain to a core residue before attacking a second chain, alpha RNase H is a random exoribonuclease that releases the polynucleotide after each scission. Highly purified Moloney-MSV(MLV) DNA polymerase has both RNase H activity and the ability to read viral 60-70S RNA. These activities comigrate through five different steps of purification and are present at levels comparable to those found in purified AMV DNA polymerase. The MSV(MLV) 60-70S RNA genome and 35S RNA subunits were shown by periodate oxidationtritiated borohydride reduction to contain adenosine as the major 3'-terminal nucleoside. Poly (A) segments were isolated from viral 60-70S and 35S RNA by treatment with RNase A or RNase T1 and purified by afinity chromatography and gel electrophoresis. Viral poly(A) was shown to be present at the 3' terminus as -G(C,U)A190AOH. The similar sequence reported for poly(A) present in mammalian mRNA suggests that similar mechanisma are involved in the transcription and processing of both cellular and viral DNA sequences. Within transformed cells replicating MSV(MLV), viral 35S and 20S RNA were found in membrane-bound polyribosomes, whereas only 35S RNA was detected in free polyribosomes. The origin and function of 20S RNA is unknown. The early events during rapid infection and cell transformation of mouse 3T6 cells by the Harvey strain of MSV(MLV) were studied. By both autoradiographic analysis and molecular hybridization, viral DNA synthesis was detected in the cytoplasm by 1 hour after infection, reached a maximum at 2 hours, and subsequently decreased. Cytological chase experiments produced evidence that cytoplasmic viral DNA was transported to the nucleus. In situ hybridization experiments using radioactive viral DNA product as a probe demonstrated the rapid association of viral DNA sequences with the chromocenters of interphase nuclei and with the centromeric heterochromatin regions of some chromosomes.