A new region of the adenovirus E1a protein essential for immortalization and transformation of primary rat kidney cells has been identified. This region is located between amino acid residues 18 to 20 in an N-terminal domain that is not conserved among the various adenovirus serotypes. The transformation defective mutant (18-0) mapping in this region is not impaired in its ability to trans-activate the viral E2 promoter and to repress the activity of certain enhancer elements. Mutant 18-0 appears to have only a partial defect in the induction of cellular DNA synthesis in quiescent primary cells suggesting that the N-terminal region plays a role in immortalization and transformation by a mechanism that may not fully depend on induction of cellular DNA synthesis. Mutant 18-0 and another transformation defective mutant (125-7) mapping between amino acid residues 125 to 127 in a conserved domain are defective in the induction of an epithelial cell growth factor, suggesting that growth factor induction may be important for some aspect of adenovirus mediated immortalization and transformation.