Cultured eithelial cells derived from the livers of 10-day-old Fischer 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. DNA has been isolated from tumors induced in rats initiated with N- nitrosodiethylamine and fed a diet deficient in methionine and choline and used in the NIH 3T3 cell transfection assay. Results indicate that activation of the c-Ha-ras oncogene appears to be involved in the development of hepatocellular carcinomas in methyl-deficient rats. This gene is hypomethylated in the liver tumors of rats fed the methyl-deficient diets.