We present a genetic, developmental and molecular analysis of lethal(1)discs large-1[l(1)d.lg-1; Stewart et al., 1972], an oncogene of Drosophila. Mutations in this gene cause the imaginal discs to grow by cell proliferation beyond their normal final size, transform into solid tumors, fuse with one another and the brain, and lose their ability to differentiate. The oncogene represents the only known complementation group between two deficiency breakpoints, and 15 recessive lethal alleles are available. Cloning of the DNA between the two deficiency breakpoints defines a region of 45 +/- 2 kb. The l(1)d.lg-1 transcription unit is identified by both qualitative and quantitative effects of several l(1)d.lg-1 mutations on the RNA transcripts and by the presence of a DNA insert in one of the l(1)d.lg-1 alleles. It gives rise to at least five different transcripts ranging in size from 1.9 to 6.0 kb. Three other transcription units are present within this region, two 5' to the l(1)d.lg-1 gene and one at the 3' end. A near full-length cDNA from one of the larger transcripts of l(1)d.lg-1 has homology to genomic DNA spanning over 20 kb. A developmental profile of l(1)d.lg-1 transcription is presented. We discuss how mutations in this gene could disrupt epithelial structure and how this might be related to the excessive cell proliferation and interdisc fusion that is observed. We also compare this gene with another recessive oncogene of Drosophila, lethal(2)giant larvae, that has been cloned and characterized.