In vitro infection of bone marrow or fetal liver cells with retroviruses containing fes, abl, ras, or src oncogenes resulted in the transformation of early B lineage cells. All cell lines tested possessed rearrangements at the Ig heavy chain locus and some had rearrangements at the K chain locus. The majority of the lines corresponded phenotypically to Lyb-2+, Ly-5(B220)+, ThB- large pre-B cells, although some were classified as pro-B cells because of their Lyb-2+, Ly-17+, Ly-5(B220)- phenotype. We identified two cell lines that contained subpopulations of cells that coexpressed the B lineage antigens Lyb-2 and Ly-5(B220) and the myeloid lineage antigen Mac-1. Single-cell FMF cloning of these subpopulations showed that Mac-1+ cells were derived from Mac-1- cells and that these Mac-1+-cloned cells further differentiated into cells with phenotypic and functional characteristics of mature macrophages.