The mechanism for resistance to osmotic stress in V79 Chinese hamster cells is unknown. Previous experiments have provided little or no support for mechanisms based on gene mutation or stable changes in gene expression. An alternative explanation, based on gene amplification is offered in the present study. The evidence comes from experiments with PALA, which is N(Phosphonoacetyl)L-aspartate. Since no other mechanism than gene amplification is known for resistance to PALA, PALA resistance can be used as a reporter for gene amplification in other systems if cross-resistance occurs. Clonal lines resistant to hypertonic NaCl or to hypertonic mannitol were cross-resistant in dose-response tests with graded PALA. PALA resistant lines were also obtained by direct exposure of sensitive stock V79 cells to appropriate levels of PALA. In subsequent tests these lines were found to be refractory to osmotic stress when exposed to hypertonic NaCl or hypertonic mannitol. These results suggest that PALA and osmotic stress act as inductors as well as selective agents. The induction of gene amplification is not confined to the system under selection, but occurs at other points in the genome. It is this more general induction that explains cross-resistance between two otherwise unrelated characteristics.