We have previously described the neoplastic transformation of immortalized human bronchial epithelial cells (BEAS-2B) by the combination of the c-raf-1 and c-myc protooncogenes and the concomitant induction of neuron-specific enolase mRNA expression (A. Pfeifer et al., Proc. Natl. Acad. Sci. USA, 86: 10075-10079, 1989). In this paper we describe the morphological, biochemical, and immunohistochemical characteristics of the primary c-raf-1/c-myc tumors, xenografts of these tumors, and tumors that originated from cell lines of the primary neoplasm. The tumors were morphologically characterized by the appearance of desmosomes and tonofilaments, microvilli, and dense core granules representing markers of squamous, glandular, and neuroendocrine differentiation, respectively. A total of 11 of 13 tumors were positive by immunohistochemical techniques for neuron-specific enolase, serotonin (nine of 13), and calcitonin (six of 13). Keratins were expressed in 11 of 13 tumors, and while specific keratins (K5, K7, K16/K17) decreased, there was an increase of vimentin in the tumor cells. Gastrin-releasing peptide immunoreactivity was detectable in a small number of tumors (five of 13). BEAS-2B cells transfected with the c-raf-1 and c-myc protooncogenes and cell lines established from the primary tumors expressed major histocompatibility Class II antigen which has been found on small cell lung carcinoma cells. The tumors induced by the c-raf-1 and c-myc protooncogenes resemble the multidifferentiated phenotype of small cell lung cancer frequently detected in vivo and present a defined model to study the relation between molecular markers, phenotypical appearance, and response to chemotherapeutic agents and radiation.