Injection into nude mice of a well-differentiated SV40 T-antigen-transformed murine endothelial cell (EC) line results in widespread invasive tumors confined to connective tissues. The tumors, which do not metastasize, consist of both host-derived cells and transformed EC, displaying histologic features typical of Kaposi's sarcoma (KS). Although the EC is believed to be the cell of origin in KS, this has not been proven and is the subject of debate. The unusual tumorigenicity of this transformed cell suggests that EC-specific gene products induced by SV40 T antigen may contribute to tumorigenesis by autocrine growth stimulation and recruitment of host cells. KS-like tumors may be the result of EC alteration by any virus that induces relevant EC-derived cytokines.