We transfected the human EJ bladder carcinoma oncogene (Ha-rasEJ-1) into multipotential embryonal carcinoma cell line P19. The transgenic P19(ras+) cells expressed high levels of both the mRNA and the p21EJ protein derived from the oncogene. When cultured in the presence of retinoic acid, P19(ras+) cells differentiated and developed into the same spectrum of differentiated cell types as the parental P19 cells (namely, neurons, astrocytes, and fibroblast-like cells). Thus, it seems unlikely that the Ha-ras-1 proto-oncogene product plays a role in initiation of differentiation or in the choice of differentiated cell lineage. Most of the P19(ras+)-derived differentiated cells contained relatively low levels of p21EJ and were nontransformed, whereas certain cells with fibroblast-like morphology continued to express the Ha-rasEJ-1 gene at high levels and were transformed (i.e., immortal and anchorage independent). Fibroblasts derived from P19 cells did not become transformed following transfection of the Ha-rasEJ-1 oncogene, suggesting that transformation of the fibroblast cells only occurred if the oncogene was present and expressed during the early stages of the developmental lineage.