Daunorubicin, a clinically useful antitumor agent, induces mammary adenocarcinoma in Sprague-Dawley rats. As part of an investigation of the mechanism of tumor induction by daunorubicin, the formation of daunorubicin-DNA adducts has been investigated by 32P-postlabeling assay. Rat-liver DNA incubated with either 0.05 or 0.1 mM daunorubicin, rat-liver microsomes, and 5 mM reduced nicotinamide adenine dinucleotide phosphate (NADPH) for 1 h contained covalent DNA adducts in addition to the endogenous adduct profile present in control DNA. With 1.5 mM cumene hydroperoxide serving as a cofactor, higher levels of these two adducts and two additional adducts were formed, all of which most likely were daunorubicin-DNA adducts. This latter treatment also resulted in an intensification of three endogenous DNA modifications over levels occurring in control DNA. Covalent DNA alterations in vivo were studied in rats treated with 20 mg/kg daunorubicin for 2 days and 200 mg/kg on the 3rd day. Daunorubicin-DNA adducts as observed in vitro could not be detected in DNA of liver or mammary epithelial cells. The levels of endogenous modifications in drug-treated rats were increased by 200% in mammary DNA and by 50% in hepatic DNA as compared with controls. It was concluded from these experiments that daunorubicin may be metabolically activated to a reactive metabolite that binds covalently to DNA. These daunorubicin-DNA adducts may not play a role in tumor induction because they were not detectable in vivo. However, the increase in levels of endogenous DNA modifications induced by daunorubicin both in vitro and in vivo is consistent with a role of this class of DNA modification in the carcinogenic process.