The neu gene is distantly related to the erbB gene and encodes a cell surface protein that appears to function as a growth factor receptor. To study the mechanisms that caused the conversion of the normal neu gene to an oncogenic allele, we have isolated molecular clones of the neu oncogene as well as a clone of the corresponding protooncogene. The transforming neu oncogene and the proto-neu gene clones exhibit identical restriction enzyme patterns. Amplification of the proto-neu gene in NIH 3T3 cells by means of cotransfection with a dihydrofolate reductase gene resulted in methotrexate-resistant colonies that produce high levels of normal neu-encoded p185 protein. In contrast to cells carrying low levels of the oncogene-encoded protein, these cells appeared normal. The results suggest that the lesion that led to activation of the neu gene is a minor change in DNA sequence and is apparently located in the protein-encoding region of the gene.