We report the development of extrathymic lymphoblastic lymphomas in RadLV-inoculated congenitally athymic nude mice. Thus, a leukemogenic virus which appears to require the presence of a thymus for its replication in normothymic mice can infect and transform target cells in the absence of this organ in the athymic host. The cells of one of these lymphomas have been established in vitro as a permanent cell line, BALB/Nu1. This cell line as well as a lymphoma induced in NIH/Swiss nude mice exhibit several T-cell markers, including terminal deoxynucleotidyl transferase activity, Thy-1.2, and Ly-2.2, but not Ly-1.2 nor TL. Ig determinants were not detected. The characteristics of the tumor cells support the view that cells with T-cell markers may normally exist in nude mice and undergo neoplastic transformation and clonal expansion after infection with a leukemogenic virus. The alternative possibility that virus-induced differentiation of prothymocytes may lead to the expression of Thy-1.2 and Ly-2.2 antigens is also considered. BALB/Nu1 cells release large numbers of type C viral particles. The virus, designated radiation leukemia virus (RadLV)/Nu1, has RTase activity and the protein profile characteristic of murine leukemia virus (MuLV). In radioimmunoassays, it cross-reacts completely with RadLV/VL3, a virus obtained from RadLV-induced C57BL/Ka thymic lymphoma cells in culture, and slightly with a xenotropic virus (BALB:virus-2) and with AKR MuLV. On inoculation into C57BL/Ka mice it has thymotropic and leukemogenic activity. In vitro it is B-tropic, poorly fibrotropic, and has limited xenotropic activity. Thus, RadLV/Nu1 appears to be biologically and serologically similar or identical to its parent virus, RadLV.