Only two avian oncogenic viruses specifically cause acute leukaemias yet do not transform chicken fibroblasts in culture: E26, which causes erythroblastosis and a low level of concomitant myeloblastosis in chickens, and avian myeloblastosis virus (AMV), which causes myeloblastosis exclusively. Both viruses are replication-defective and share a sequence termed myb (also known as amv) which is unrelated to essential virion genes and is therefore thought to be part of the transforming onc genes of these viruses. However, the genetic structure of the two viruses differs. E26 has a genomic RNA of 5.7 kilobases (kb) and encodes a 135,000 molecular weight gag-related protein (p135) with probable transforming function. We show here by in vitro translation that the 5.7-kb E26 RNA directs the synthesis of p135. Oligonucleotide analysis indicates that E26 RNA contains an internal 0.8-kb subset of the 1.2-kb AMV-related sequence (mybA), termed mybE. A 2.46-kb molecular clone prepared from cDNA transcribed in vitro from E26 RNA contained an E26 transformation-specific (ets) sequence flanked by mybE and an env-related sequence. A complete DNA sequence of this clone indicates that the 1.5-kb ets sequence extends the open reading frame of mybE for 491 amino acids. Thus, the p135 gene of E26 is a genetic hybrid of three distinct elements, approximately 1.2 kb derived from the 5' region of the retroviral gag gene, mybE and the ets sequence, linked in the order 5'-delta gag-mybE-ets-3'. The myeloid leukaemogenicity shared by E26 and AMV correlates with the common myb sequence, while the distinct erythroid leukaemogenicity of E26 correlates with ets and the E26-specific linkage of myb to delta gag.