We have reported previously on the first spontaneously immortalized, nonmalignant human breast epithelial cell line, HMT-3522, which is entirely dependent on exogenous epidermal growth factor (EGF). In passage 118, cells were adapted to grow in medium without EGF and a new growth-transformed subline, HMT-3522/gt-1, was generated and propagated at high growth rate without exogenous EGF (Madsen et al., Cancer Res., 52: 1210–1217, 1992). Here we have used this subline and the continuum of the parent line, HMT-3522/wt, to pose the question whether a relevant change in a physiological parameter of the microenvironment will induce malignant transformation. The two cell lines were cultured under identical conditions with the only exception that EGF was omitted in the medium for gt-1. Initially, wt and gt-1 were identical in terms of karyotype as well as morphology, growth rate, and protein expression as revealed by two-dimensional gel electrophoresis. A highly dramatic shift in phenotype was observed in passage 238 when the gt-1 line became tumorigenic in nude mice. After two mouse-culture passages, the resulting malignantly transformed cell line (HMT-3522/mt-1) was refractory to the growth-modulating effect of EGF and presented an extra copy of a chromosome marker, 7q-, as the only cytogenetic difference from the gt-1. Our results suggest that microenvironmental cues are powerful factors in the induction of malignancy. A major role of EGF receptor in the malignant transformation is emphasized by loss of EGF sensitivity and acquisition of an extra chromosome 7p harboring the EGF receptor gene. We hypothesize that during premalignant hyperplasia, a population of EGF/transforming growth factor α autonomous epithelial cells in situ may develop as a consequence of local transforming growth factor α deprivation, a condition reflected in the culture model as autonomy after EGF withdrawal.