A type of heritable cellular change, known as habituation, occurs spontaneously in plant tissue and cell culture. This phenomenon is characterized by a newly acquired capacity of plant cells to produce growth regulatory substances. Using cloned lines of tobacco pith parenchyma cells, we demonstrated that a newly acquired character, in this instance an ability to produce a factor promoting cell division, is inherited by individual cells, that it persists for long periods of time, but that it is regularly reversible under completely defined experimental conditions. Evidence is presented that suggests that habituation results from heritable alterations in the pattern of gene expression and that it can, therefore, be used as a model for study of cell differentiation. The significance of these findings to the tumor problem is discussed.