To overcome the difficulty of assessing oncogene action in human epithelial cell types, such as thyroid, which have limited proliferative potential in culture, we have explored the use of temperature-sensitive (ts) mutants of simian virus 40 (SV40) early region to create conditionally immortalized epithelial cell lines. Normal primary cultures of human thyroid follicular cells were transfected with a plasmid containing the SV40 early region from mutant tsA58. Expanding epithelial colonies were observed after 2 to 3 months, all of which grew to greater than 200 population doublings without crisis. All showed tight temperature dependence for growth. After switch-up to the restrictive temperature (40.5 degrees C), no further increase in cell number was seen after 1 to 2 days. However, DNA synthesis declined much more slowly; the dissociation from cell division led to marked polyploidy. Viability was maintained for up to 2 weeks. Introduction of an inducible mutant ras gene into ts thyroid cells led, as expected, to morphological transformation at the permissive temperature when ras was induced. Interestingly, this was associated with a marked reduction in net growth rate. At the restrictive temperature, induction of mutant ras caused rapid cell death. These results demonstrate the utility of a ts SV40 mutant to permit the study of oncogene action in an otherwise nonproliferative target cell and reveal important differences in the interaction between ras and SV40 T in these epithelial cells compared with previously studied cell types.