A clonal cell line derived from a functional and transplantable rat thyroid tumor was established in continuous monolayer culture by the use of enzymatic dissociation followed by an alternate culture-animal passage procedure. After being implanted backin the animal and again plated in culture, epithelial-like cells aggregated and rearranged themselves over the bottoms of dishes in structures resembling cross sections of a normal thyroid gland. The same morphology and growth pattern were maintained after innumerable subcultures and freeze/thawing periods. Cells grew with a population-doubling time of about 24 h in serum-supplemented synthetic medium. Cell monolayers stained with periodic acid-Schiff (PAS) showed a uniformly epithelial-like morphology; their cytoplasm contained abundant PAS-positive material that was resistant to enzymatic digestion with amylase. Thin-layer chromatography of acid-butanol cell extracts in primary and clonal cultures, followed by a specific and sensitive staining method for iodine compounds, demonstrated the presence of monoiodotyrosine (MIT), diiodotyrosine, and triiodothyronine-thyroxine. In contrast, in similar extracts obtained from a cultured liver cell line, the only iodinated amino acid was MIT. Thus, with regard to the above criteria, this cell line preserved specialized thyroid cell morphology and function.