Epithelial cells derived from the livers of 10-day-old Fisher 344 rats are used as a model system for studying the mechanism of carcinogenesis resulting from an insufficiency of methyl donors. Transformation of liver cells has been achieved following treatment with 3-deazaadenosine (DAA). This compound is metabolized to 3-deazaadenosylhomocysteine, a potent inhibitor of S-adenosylhomocysteine (AdoHcy) hydrolase, and results in an accumulation of AdoHcy, a competitive inhibitor of most physiological methylation reactions. DAA administration was shown to inhibit methylation of DNA. DNA has been isolated from tumors induced in rats intiated with DEN and fed a diet deficient in methionine and choline and use in the NIH 3T3 cell transfection assay. Results indicate that activation of an oncogene may be involved in the development of hepatocellular carcinomas in methly-deficient rats.