We have previously demonstrated that murine tumor cells transduced with a retrovirus containing the cDNA encoding wild-type human TNF regress in vivo when injected into immunocompetent mice; this regression is T cell mediated. To determine whether membrane-associated or secreted TNF was responsible for tumor regression, we transduced a cloned murine fibrosarcoma 205 F4 with retroviruses encoding modified human TNF genes. The cloned tumor lines of one retroviral transduction expressed only membrane bound 26-kDa TNF. This TNF could not be cleaved or secreted, but was present on the cell surface. A second retrovirus caused the expression of only secretory 17-kDa TNF, as the transmembrane domain of the cDNA was deleted. The TNF produced by tumor cells transduced with either retroviral vector was functional in vitro as direct lysis of the TNF-sensitive target L929 by transduced tumor cells was demonstrated. The TNF present on 26-kDa expressing tumors was membrane bound as supernatants from cultured 17-kDa TNF expressing tumor cells but not 26-kDa TNF expressing tumors mediated the lysis of L929 cells. Both tumors were injected s.c. into syngeneic mice and tumor growth was measured serially. In repeated experiments, 26-kDa TNF expressing tumors grew progressively in all mice. In contrast, 17-kDa TNF expressing tumors grew for 10 days and then regressed with all animals free of tumor at 28 days. Tumor regression was abrogated by in vivo injection of an anti-TNF antibody. Similar results were obtained in a second tumor model, 203 E4. Thus regression of TNF transduced tumors in vivo requires secretion of TNF, as membrane-bound TNF is insufficient to elicit the host response.