Cyclins are major cell cycle regulators which role in malignant transformation remains controversial. In this report we describe a new mechanism of cyclin oncogenic activation. We demonstrate that an altered form of cyclin A2 (S2A) which N-terminal part is replaced by the hepatitis B virus envelope protein transforms normal rat kidney cells and cooperates with ras to transform rat embryo ®broblasts. In contrast, neither the viral moiety, nor a full length or N-terminally deleted cyclin A2 show these oncogenic properties. S2A oncogenicity arises from its binding to cyclin dependent kinases, since mutation in the MRAIL sequence abolishes transformation and correlates with an abnormal cellular localization in the endoplasmic reticulum membrane. Together, these results implicate modi®cation in the cellular distribution of a cell cycle regulator as a mechanism of virally-induced transformation.