Arsenic is a known human carcinogen, but little evidence exists for its carcinogenicity in animals. In order to investigate the ability of inorganic arsenics to transform normal cells into a neoplastic state, mass cultures of normal, diploid Syrian hamster embryo (SHE) cells exposed to various concentrations of sodium arsenite or sodium arsenate for 48 hr were continually passaged and tested for neoplastic transformation, as determined by anchorage-independent growth in semisolid agar and tumorigenicity in newborn hamsters. Twenty-one of 22 (96%) untreated, control cultures senesced by 20 passages. While 1 culture escaped senescence, it did not acquire the ability to either grow in semisolid agar or form tumors in animals. Ten of 14 (71%) cultures exposed to sodium arsenite or sodium arsenate escaped senescence. Nine of the 10 (90%) arsenic-treated immortal cultures acquired the anchorage-independent phenotype. Five of 5 anchorage-independent cultures examined were tumorigenic. Two of 3 morphologically transformed colonies induced by sodium arsenate also acquired the ability to grow in semisolid agar when isolated. Amplification of the c-myc or c-Ha-ras oncogene was detected in 3 of 5 and 4 of 5 tumorigenic cell lines, respectively. Both c-myc and c-Ha-ras were amplified even in a preneoplastic, anchorage-dependent cell line, but neither was amplified in 6 of 9 anchorage-independent cell lines. Overexpression of c-myc and c-Ha-ras mRNA was observed in most of the neoplastically transformed cell lines but not in the preneoplastic cell line. Experiments using the methylation-sensitive restriction endonuclease isoschizomers HpaII and MspI revealed hypomethylation of c-myc and c-Ha-ras in the 5′-CCGG sequence of arsenic-exposed cell lines but not in the parental SHE cells or a spontaneously transformed cell line. Thus, inorganic arsenics induce neoplastic transformation of normal, diploid mammalian cells. Overexpression of oncogenes by DNA hypomethylation may participate in the arsenic-induced neoplastic transformation of mammalian cells. Published 2002 Wiley-Liss, Inc.