Human epidermal cells were transformed with DNA from wild-type SV40 virus or with DNA from a temperature-sensitive A mutant (tsA209). The SV40-transformed cells differed from nontransformed cells in their morphologic appearance, growth properties, and expression of certain characteristics associated with differentiation. The transformed cells were more variable in size and shape than their nontransformed counterparts and were less stratified and less keratinized. While the growth properties of the cells were similar under optimal growth conditions, the transformed cells could be propagated under stringent growth conditions that did not support the growth of nontransformed human epidermal cells. The transformants still required a 3T3 feeder layer for growth, remained anchorage dependent as assayed in soft agar, and were not tumorigenic in athymic nude mice. The expression of certain differentiated functions of the human epidermal cell, the presence of keratins and cross-linked envelopes, was decreased in the transformed cells, and these functions could be restored at the nonpermissive temperature in the tsA209 transformed cells.