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Rat retinal pigment epithelial (RPE) cells were immortalized by infection with a temperature-sensitive tsA SV40 virus and following cloning and selection for epithelial properties the polarized RPE-J cell line was obtained. At the permissive temperature of 33 degrees C, RPE-J cells behave as an immortalized cell line. When RPE-J cells are grown on nitrocellulose filters coated with a thin layer of Matrigel in the presence of 10(−8) M retinoic acid for 6 days at 33 degrees C and then switched for 33–36 hours to the non-permissive temperature of 40 degrees C, they acquire a differentiated polarized RPE phenotype. Under these growth conditions, RPE-J cells exhibit circumferential staining for the tight-junction protein ZO-1 and acquire a transepithelial resistance of 350 ohms cm2. Morphologically, RPE-J cells exhibit a characteristic RPE morphology with extensive apical microvilli as well as numerous dense bodies including premelanosomes and varied multilamellar structures. Ruthenium red labeling revealed the frequent basal localization of the tight junction. The cells were identified to be of rat RPE origin by their expression of the rat RPE marker RET-PE2 and their ability to phagocytose latex beads. While RPE-J cells are capable of sorting influenza and vesicular stomatitis virus to the apical and basal surfaces, respectively, the Na,K-ATPase is not polarized and the neural cell adhesion molecule, N-CAM, is localized exclusively to the lateral surface. In vivo the apical surface of RPE interacts with the adjacent neural retina and the Na,K-ATPase and N-CAM are both apical; the altered polarity of these two proteins in RPE-J cells may be a consequence of the absence of apical interaction with the neural retina in culture. Previous studies of RPE have been restricted to the use of primary cultures and the RPE-J cell line should prove an excellent model system for the study of the mechanisms determining the characteristic polarity and functions of the retinal pigment epithelium.