Retroviruses containing the myc oncogene as part of their genomes may encode proteins containing both viral structural and cellular oncogene domains (MC29 and CMII viruses), or only the cellular domain (MH2 and OK10 viruses). The hybrid protein encoded by MC29 virus, p110 gag-myc, migrates to the nucleus soon after synthesis, and can be found associated with the nuclear matrix and with chromatin. The protein has a short half-life (30-40 min) in the cells, and another labile intranuclear protein has been shown to be responsible for its degradation. About one-third of newly radiolabeled p110 is associated with chromatin, which is more resistant to degradation than the two-thirds found free in nucleoplasm. Preliminary experiments suggest that the association of p110 with chromatin requires binding to DNA, which is consistent with the reported DNA-binding capability of p110. Cells transformed by MC29 virus and related viruses have enlarged nucleoli which are not a consistent feature of other transformed or nontransformed cells. These myc-transformed cells incorporated a high proportion of radioactive uridine into nucleolar RNA. Also, transcription in isolated nuclei was more resistant to a specific inhibitor of mRNA synthesis, demonstrating an enhanced level of rRNA synthesis. Failure of rRNA processing enzymes to keep pace with increased synthesis resulted in the accumulation of an rRNA precursor (32S RNA), which was the main RNA constituent of the enlarged nucleoli of myc-transformed cells. Analysis of nucleolar proteins demonstrated the increased synthesis of a specific protein, p98, which may be responsible for the noted increased rRNA synthesis. The apparent stimulation of p98 synthesis by myc proteins is under investigation.