Human small airway epithelial cells (SAECs) previously immortalized with human telomerase reverse transcriptase (h-TERT) were continuously treated with sodium arsenite at a dose of 0.5 μg/mL in culture for up to 6 months. Arsenic-treated cells progressively displayed an increase in transformed phenotype including enhanced growth saturation density, plating efficiency, and anchorage-independent growth and invasion capability compared with their nontreated control cells. To determine whether arsenicinduced cell transformation was associated with genomic instability, treated and control cells were also analyzed for micronuclei formation. A 4.8-fold increase in micronuclei incidence in arsenic-treated cells was detected in conjunction with increased N-phosphonacetyl-L-aspartate (PALA)-resistant characteristics. In addition, arsenic-treated cells showed an increase in c-H-ras, c-myc, and c-fos protein expression relative to controls. The change in oncoprotein expression correlated with a decrease in wildtype p53 expression and hyperphosphorylated retinoblastoma. Taken together, these results strongly suggest that h-TERT immortalized human small airway epithelial cells underwent step-wise transformation after inorganic arsenic treatment.