The preneoplastic D-2 hyperplastic outgrowth line, which was derived from a hormone-induced hyperplastic alveolar nodule (HAN) of a BALB/c mouse, was used for a detailed analysis of mouse mammary tumor virus (MMTV) expression. The D-2 HAN line has previously been shown to express viral RNA representative of the entire genome, although viral particles have been noted only rarely. The MMTV-specific mRNA, protein, and DNA content of the D-2 tissues was defined in an effort to better understand the molecular basis of the aberrant virus expression. Northern blotting techniques demonstrated the presence of properly processed 8.9 kb (genomic) and 3.6 kb (envelope) mRNA. Protein electroblotting procedures established the presence of properly processed viral core protein p28. In contrast, the envelope precursor polyprotein was not processed into detectable levels of gp52. Analysis of MMTV proviral content by Southern blot methodology revealed the presence of a newly acquired provirus which serves as a marker for the clonal nature of the D-2 line. The origin of the new provirus is unknown. Methylation studies established that the new proviral insert is hypomethylated and, therefore, is likely serving as the template for the MMTV expression observed in the D-2 HAN line. These characteristics of the D-2 line make it an excellent system in which to study the role, if any, of MMTV in the progression of D-2 preneoplastic tissues to the tumor phenotype.