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Replication of Rous sarcoma virus (RSV) in avian fibroblasts leads to the generation of replication-competent variants that are defective for cell transformation (td virus). These td variants contain deletions affecting various portions of the v-src gene. We compared the rate of td virus production in Q3B cells, a quail cell line established by mutagen treatment, and in normal quail fibroblasts. Twenty-five days after infection with an RSV stock containing only transforming virions, Q3B cells harbor similar amounts of v-src-containing and v-src-deleted proviruses. However, these cells synthesize very low levels of p60v-src and generate large excess of td variants, as determined by biological assays. Unlike Q3B cells, normal quail fibroblasts infected with the same virus stock produce td variants only after multiple passages of undiluted virus on fresh cells. Restriction analysis showed that the td virus produced by Q3B cells is composed of two types of genomes: one lacking the entire v-src gene and the other carrying partial deletions of this gene predominantly located in the amino-terminal portion of the coding region of v-src. To study the mechanisms of these partial deletions, we molecularly cloned and sequenced the v-src genes of several td proviruses. We show that these mutants carry single or multiple v-src deletions of limited size, presumably generated by multiple mechanisms. Two deletions of 170 and 112 bp located in the 5' portion of v-src are frequently generated during RSV replication in Q3B cells and may represent preferential sites for v-src deletion in these cells.