Activated c-Ha-ras DNA sequences were introduced by transfection into a low passage simian virus 40 (SV40)-immortalized rat hepatocyte cell line, CWSV1, and stable ras transfectant cell lines were established to determine the effect of the addition of the activated c-Ha-ras oncogene on growth properties and differentiation. Control transfectant cell lines were generated by transfection with neo alone. CWSV1 cells at low passage and the control transfectants were not tumorigenic. The ras transfectants demonstrated anchorage-independent growth and were highly tumorigenic in syngeneic hosts. CWSV1 cells produce liver-like levels of albumin and express other liver-specific genes. The ras transfectants expressed RNA for albumin, transferrin, and the transcription factor HNF-1 at similar levels to the parental CWSV1 cells, indicating that the alterations in growth properties and tumorigenic potential of these cells did not decrease the ability of the cells to express several genes that are associated with hepatocyte differentiation. The addition of the ras oncogene did not induce the expression of alpha-fetoprotein and had no specific effect on expression of glutathione S-transferase-P. The tumors produced by the ras transfectants were not well differentiated; however, the cells in the tumors and tumor cell lines derived from the tumors continued to produce albumin and did not produce alpha-fetoprotein. We conclude that the addition of the activated c-Ha-ras oncogene to immortalized CWSV1 cells transformed these cells as measured by morphology, growth properties, and tumorigenicity without reducing their ability to express albumin and other significant liver-specific genes.