The p117 keratinocyte cell line was derived in culture from chemically induced mouse papillomas. The benignly transformed nature of these cells was demonstrated by their ability to re-form benign papillomas when grafted back onto the animal. Retroviral vectors were used to introduce into the p117 cells three distinct oncogenes: v-Ha-ras, p53, and neu. All three oncogenes were able to induce tumorigenic conversion of the p117 keratinocytes when assayed by subcutaneous injection into nude mice. However, grafting the oncogene-transformed cells onto the back of the mouse revealed important differences in the ability of the three oncogenes to induce a fully malignant phenotype. While the ras-transformed papilloma cells formed aggressive carcinomas, p53 and neu transformation yielded an intermediate phenotype, with formation of large exophytic tumors, not yet invasive but with highly dysplastic features remarkably similar to those of in situ carcinomas. These findings establish a homologous, genetically modifiable cell system in which various stages of malignant transformation can be directly compared.