Culture studies of peripheral blood mononuclear cells from 7 entirely typical cases of hairy cell leukemia showed that after culture in the presence of PHA for 2--5 days, the predominant cell type changed from E- SIg+ CIg+ gamma FcR+ muFcR+ hairy cells to an E+ SIg- CIg- gamma FcR-muFcR- population of transformed cells derived from hairy cells. Depletion and readdition experiments demonstrated that cell-to-cell contact with T cells was necessary for the phenotypic change, while several observations indicated that the E+ population was not derived from T cells present before culture. The E positivity of the cultured cells was shown to be due to the possession of E receptor not acquired from the culture fluid, but the cells differed from true T cells in lacking both mature and immature T-cell antigens. The relevance of these in vitro observations to the continuing controversy concerning the nature of the hairy cell and to the in vivo fluctuations in immunologic phenotype not infrequently observed in hairy cell leukemia is briefly discussed.