Reactive oxygen species (ROS) have been implicated in the activation of protein kinases, DNA damage responses, and cell apoptosis. The details of how ROS regulate these intracellular biochemical and genetic processes remain to be fully understood. By establishing transformed bronchial epithelial cells through chronic low-dose arsenic treatment, we showed that the capacity of ROS generation induced by arsenic is substantially reduced in the transformed cells relative to the nontransformed cells. Such a reduction in ROS generation endows cells with premalignant features, including rapid growth, resistance to arsenic toxicity, and increased colony formation of the transformed cells. To validate these observations, the capability of ROS generation was restored in the transformed cells by treatment with inhibitors or siRNAs to silence the function of superoxide dismutase (SOD) or catalase and cell growth was determined following these treatments. Enhancement in ROS generation suppressed cell growth and colony formation of the transformed cells significantly. Despite the fact that the transformed cells showed a decreased expression of NF-kappaB signaling proteins IKKbeta and IKKgamma, the proteolytic processing p105 and p100 and NF-kappaB DNA binding activity were elevated in these cells. Increasing ROS generation by silencing SOD and catalase reduced the DNA binding activity of NF-kappaB in the transformed cells. Taken together, the transformed cells induced by arsenic exhibited a decrease in ROS generation, which is responsible for the enhanced cell growth and colony formation of the transformed cells, most likely through a sustained alternative activation of the NF-kappaB transcription factor.