The activities of two galactosyl transferases catalysing the formation of di- and tri-glycosyl ceramides in NIL-2 hamster cells have been studied with respect to culture age and density, subcellular distribution, and transformation of cells by virus. The activity of the transferases was found to increase considerably as culture density increased, although maximal activities were found before appreciable cell contact occurred. The highest transferase activities were found in the endoplasmic reticulum. Virus transformation reduces the activity of the transferase catalysing triglycosyl ceramide synthesis, while the transferase catalysing diglycosyl ceramide synthesis is slightly increased. There is no evidence that the transformed cells produce a dialysable soluble inhibitor of transferase activities.