The biological effects of ras oncogene activation in B cells were studied by using amphotropic retroviral vectors to introduce H- or N-ras oncogenes into human B lymphoblasts immortalized by Epstein-Barr virus. Expression of both H- and N-ras oncogenes led to malignant transformation of these cells, as shown by clonogenicity in semisolid media and tumorigenicity in immunodeficient mice. In addition, terminal differentiation into plasma cells was detectable as specific changes in morphology, immunoglobulin secretion, and cell surface antigen expression. This combined effect, promoting growth and differentiation in human lymphoblasts, represents a novel biological action of ras oncogenes and has implications for the pathogenesis of terminally differentiated B-lymphoid malignancies such as multiple myeloma.