The ETS related gene, ERG, is one of 20 or more genes belonging to the ETS family of transcription factors. Translocation of the ERG gene t(21;22) results in the chimeric fusion transcript seen in approximately 10% of Ewings sarcomas. In addition, recent studies have shown that a reciprocal translocation t(21;16) of ERG gives rise to two aberrant transcripts seen in some forms of acute myeloid leukaemia. In vitro studies have linked the up regulation of ERG expression with stromal cell independence in erythroleukemic clones and shown that the ERG related genes ETS1 and ETS2 have a mitogenic and transforming activity when overexpressed in NIH3T3 cells. Interestingly ERGB/FLI-1, which is also involved in Ewings sarcoma translocations and shares a very high sequence identify with ERG has been reported to be unable to transform NIH3T3 cells. In this study we investigate the effects of overexpression of ERG on cell proliferation, factor dependence, growth in soft agar and tumorigenesis in nude mice. An ERG expression construct with the human ERG2 cDNA driven by the sheep metallothionein la promoter (sMTERG) was transfected into NIH3T3 cells. Clonal cell lines overexpressing ERG were established. The cell lines became morphologically altered, grew in low serum and serum free media and gave rise to colonies in soft agar suspension. Furthermore, we demonstrate that after subcutaneous injection these clones grow as solid tumors in nude mice. These data demonstrate that c-ERG is a proto-oncogene capable of transforming NIH3T3 cells. Therefore, overexpression or inappropriate expression of ERG may contribute to oncogenesis.