When bovine papillomavirus (BPV) or its 7.9-kilobase full viral DNA genome induces focal transformation of mouse cells, the viral DNA is maintained in the transformed cells as multiple episomal copies. This transforming capacity and maintenance of the episomal state previously has been localized to a 69% subgenomic fragment of the viral DNA genome. We now have characterized further the BPV DNA sequences that can encode the transforming function. We first created a series of BPV DNA deletion mutants and correlated the location of the deletions with the capacity of the deleted viral DNAs to induce transformation of mouse cells. The results indicated that two discontinuous segments of the viral DNA were required for transformation. One segment, near the 5' end of the 69% transforming fragment, probably represents a control element of the viral DNA. The second segment, which lies within the 3' end of the 69% fragment, encodes transforming sequences of the viral DNA; ligation of a retroviral control element (the long terminal repeat DNA of Harvey murine sarcoma virus) to the 2.3-kilobase segment at the 3' end of the 69% fragment induces transformation of mouse cells. In contrast to mouse cells transformed by the full-length BPV DNA genome, the cells transformed by the deleted BPV DNA genomes contained few viral DNA copies; at least some copies appeared to be integrated. We conclude that different viral functions mediate cellular transformation and maintain the viral DNA in its episomal state.Papillomaviruses, which are a subgroup of the papovavirus group (1), induce benign epithelial cell proliferations that undergo malignant conversion in certain clinical settings (2-6). Molecular and genetic studies of papillomaviruses have been limited principally because of the lack of a cell culture system suitable for virus propagation. However, bovine papillomaviruses (BPV, types 1 and 2) , which induce fibropapillomas in their natural host (7), can induce nonproductive focal transformation of certain tissue culture cells (8, 9). The infected cells are fully transformed in that they are capable of anchorage-independent growth and form tumors in nude mice. By using a mouse cell focus assay for BPV-induced transformation (9), the capacity of BPV DNA to induce cellular transformation has been localized to a 5.4-kilobase (kb) BamHI/HindIII DNA fragment, which represents 69% of the 7.9-kb full-length viral genome (10).In virions, the papillomavirus DNA genome is a closed circular molecule. Cells transformed by BPV virions, full-length viral DNA, or the 69% transforming fragment contain multiple unintegrated circular episomal copies of the viral DNA in the absence of detectable integrated copies (11). Further analysis has indicated that the transformed cells contain several polyadenylylated viral RNA species (12, 13). The bodies of these RNAs map within the 69% transforming fragment, they vary in size from 1-5 kb, their 3' termini map to a common site about 0.3 kb upstream from the BamHI site, and their 5' ends map towards...