When newly hatched chicks are given injections of Rous sarcoma virus, a tumor develops at the site of injection. In spite of the presence of the virus in the blood, no other tumors are found distant from the site of inoculation during the life span of the animal (4–6 weeks). However, if a wound is made away from the primary tumor, a tumor develops at the site of wounding. Work in our laboratory showed previously that these wound tumors do not develop as a result of metastasis, therefore, factors released upon wounding must contribute to the development of the wound tumors. In particular, we showed that transforming growth factor (TGF) β, a growth factor implicated in wound healing, can replace wounding in tumor development. However, we also showed that epidermal growth factor and TGF-α, growth factors that also have roles in wound healing, do not induce tumors. To identify the critical event(s) and to determine the mechanism involved in wound tumor development, we have continued these studies. Here we show that: (a) wound tumor development correlates with the presence of circulating virus and inflammation; (b) the virus is present in serum and in heterophils of the peripheral blood; (c) cell division at the site of wounding precedes the expression of viral proteins; (d) in addition to TGF-β, acidic and basic fibroblast growth factors can also replace wounding in tumor development; (e) these three factors (TGF-β, acidic fibroblast growth factor, basic fibroblast growth factor) which promote tumors also induce inflammation, whereas epidermal growth factor and TGF-α do not; and (f) during the inflammatory response, blood vessel leakage occurs as tested by the release of fibrinogen into the tissues. To test the possibility that inflammation is the key element in the development of these wound tumors, we used β-methylprednisolone, an antiinflammatory drug that inhibits inflammation (including blood vessel leakage), to determine if wound tumor development could be prevented. We found that when inflammation was inhibited, tumors were also inhibited; when inflammation could not be stopped, tumors developed as before. These results indicate that the effect of wounding on the development of wound tumors in Rous sarcoma virus-infected chicks is accomplished through the cytokines released by the inflammatory cells at the site of wounding. These inflammatory mediators play a critical role in providing the conductive environment for oncogene integration and activation, and subsequent development of tumors. Our results also suggest that in humans and other mammals, the tumors that develop at the sites of chronic irritation may be the result of the persistent action of inflammatory cytokines on cellular genes that are important in the maintenance of homeostasis. Overexpression or underexpression of these genes could lead to deregulation of cell function culminating in transformation.