Replication of Gross strain N-tropic type C retrovirus was markedly restricted in a pluripotential undifferentiated embryonal cell line (PCC4) of murine teratocarcinoma, whereas the same virus could cause productive infection in a myoblast-derived differentiated line (PCD1) of the same tumor origin. To investigate the restriction mechanism, we compared the initial viral DNA formation in these two cell lines. Analyses by means of a modified Hirt extraction procedure and a modified Southern gel transfer method indicated that PCC4 and PCD1 cells supported the synthesis of viral DNA intermediates after inoculation of the Gross virus. In both cells, a linear DNA duplex (from III viral DNA) appeared at 4 hr, reached a maximal level at 8-9 hr, and declined rapidly thereafter, while two closed-circular supercoiled DNA duplexes (form I viral DNA) showed their appearance, increase and decline in the 8-24 hr period. During the period from 34 to 78 hr after virus inoculation, another burst of viral DNA synthesis occurred in PCD1 cells, presumably due to secondary virus infection, while at this period both form III and form I viral DNAs became undetectable in PCC4 cells. The Hirt supernatant DNAs prepared from PCD1 and PCC4 cells 10 hr after virus inoculation were equally infectious for NIH3T3 cells in a DNA transfection, although one positive result with PCD1 cells might suggest a difference between the two cell types in this aspect. These results indicate that restriction of type C retrovirus in undifferentiated embryonal carcinoma cells occurs at a step subsequent to formation and maturation of viral DNA intermediates.