Endogenous retrovirus sequences are present in the genome of a wide variety of animal species. The activation of the proto-oncogenes of the ras family, particularly c-Ha-ras, by either point mutation or overexpression, has been shown to be associated with a vast number, of different cancers. here we report that the insertion of a defective retrovirus in the -1 intron of rat c-Ha-ras is responsible for the activation of the gene by over 10-fold overexpression in an MNU-induced rat mammary cancer. A portion of the 3' end of the retroviral sequence is expressed as a part of the c-Ha-ras transcript in the carcinoma tissue, indicating the direct involvement of this element in the transcription of the c-Ha-ras gene. The c-Ha-ras structural gene transcribed by the promoter of the defective retroviral element can neoplastically transform the NIH 3T3 cell line upon transfection.