An efficient expression cloning system has been developed to isolate cDNAs which can change cell morphologies. A cDNA library was constructed from a transformant induced by mouse hepatocellular carcinoma DNA, and the library DNA was used to transfect NIH/3T3 cells. From two of the several transformed foci obtained, identical plasmids with transforming capability were rescued. Analysis of the cDNA clones for the oncogene, designated hep1, showed that the gene was created by recombination events between an unknown gene and mouse homologue of the B-raf proto-oncogene. This genetic rearrangement was detected in two primary transformants independently induced by the original tumor DNA, suggesting that the rearrangement generating the hep1 oncogene occurred somatically, in contrast to human B-raf oncogene which was created in vitro during DNA transfection.