Epithelial-like cells from the colorectum of one-day-old newborn rats were immortalized by transfection with the simian virus 40 (SV40) T-antigen gene, and a cell line OUMS-25 was established. The cells were positive for the SV40 T-antigen, and immunoreactive to a colonic epithelial cell monoclonal antibody and a keratin-18 monoclonal antibody. Ultrastructural studies revealed the presence of microvilli on the cell surface and desmosomes between the adjacent cells. Karyotypic analysis showed that OUMS-25 cells were aneuploid. Cloning efficiency of the cells was 0.01% in soft agar. However, the cells were not tumorigenic in the syngeneic newborn rats. The cells were further transformed by transfection with the cloned activated c-Ha-ras oncogene containing a point mutation within codon 61. Characteristics of the activated-c-Ha-ras transfected cells (OUMS-25/RAS) were different in some respects from those of the parent cells (OUMS-25). OUMS-25/RAS cells demonstrated more malignant morphology, elevated cloning efficiency in soft agar, and tumorigenicity. This is the first report on the immortalization and malignant transformation of colorectal epithelial-like cells by transfection with a combination of SV40 T-antigen gene and cloned activated c-Ha-ras- oncogene.