The papillomas induced in domestic rabbits with virus procured from cottontails undergo progressive changes in the direction of malignancy when they grow vigorously. From the beginning they exhibit the traits whereby tumors are characterized, and they have malignant potentialities. In seven animals of a group of ten carrying papillomas for more than 200 days, cancer has developed, and in an eighth a tumor of problematic malignancy has arisen. One of the remaining two rabbits died early in the cancer period, and the papillomas of the other eventually retrogressed. Ten cottontails with induced growths of much longer duration have not developed cancer. The malignant tumors have all been acanthomatous in type, and have arisen directly from the papillomas by graded, continuous alterations. These have often gone further after malignancy has been attained, and have eventuated in great anaplasia. Metastasis has been frequent, and transplantation to another host has proved successful. Individual growths have occurred expressive of each stage of the transformation to cancer, as if through a stabilization at this stage; yet despite the variety thus afforded, the tumors must all be looked upon as the consequence of alterations in cells of a single sort, namely epidermal cells affected by the virus, and the alterations themselves have taken a single direction. In the morphology of many of the cancers the influence of the virus is still manifest. The better the papilloma grew, the more likely was cancer to occur, and the greater was the tendency to multiple tumors. In the most favorable rabbits malignant changes took place at numerous locations in the papillomatous tissue, and were imminent at many others. Intercurrent factors had much to do with determining frank carcinosis; and when the tendency to it was not marked their influence sometimes seemed crucial. Analogous instances of a graded alteration from papilloma to cancer are frequent in human pathology. The virus that gives rise to the rabbit papillomas must be looked upon as the primary cause of the cancers developing therefrom. Whether it is their proximate cause has yet to be determined.