Peritumoral administration of X63-m-IL-2 cells transformed by IL-2 cDNA and constitutively producing large quantities of recombinant IL-2 mediated regression of X63-Ag8.653 plasmocytoma and MC14 sarcoma transplanted in syngeneic mice. Injections of the IL-2-producing cells containing an inserted, modified IL-2 gene effectively inhibited tumour growth also in allogeneic recipients. Activation of murine spleen cells in vitro by co-cultivation with X63-m-IL-2 cells gave rise to lymphokine-activated killer (LAK) cell populations cytotoxic for the X63-Ag8.653 plasmocytoma and MC14 sarcoma. The results suggest that peritumoral administration of lymphoid cells transformed with IL-2 cDNA and constitutively producing IL-2 in the immediate tumour vicinity is sufficient for the effective activation of local IL-2-dependent tumour defence mechanisms and, therefore, can be considered a novel, genetic approach to the immunotherapy of cancer.