Epithelial cells transformed by 7,12-dimethylbenz[a]-anthracene (DMBA) in cultures of whole mammary organs of inbred BALB/cAnN female mice were characterized. Nodule-like alveolar lesions (NLAL) induced by DMBA in the mammary gland in vitro after transplantation into gland-free mammary fat pads of syngeneic hosts produced 22 of 44 hyperplastic alveolar outgrowths and 7 produced mammary carcinomas in the 1st generation. Enzymatically dissociated mammary cells from glands containing NLAL but no normal alveoli produced 8 hyperplastic outgrowths; one of these outgrowths was tumorigenic. Dissociated cells from DMBA-treated glands containing the lobuloalveolar structures produced 26 of 48 hyperplastic alveolar outgrowths and 8 of these were tumorigenic. Twelve lines of these mammary hyperplasias produced hyperplastic alveolar outgrowths and mammary tumors in a sequential manner up to 8-20 transplant generations. The sequential stages of mammary cells transformed in organ culture are similar to the sequential stages of preneoplasia to neoplasia associated with murine mammary carcinogenesis in vivo.