Treatment of quiescent Balb/3T3 clone A31-1-1 cells with 0.1-0.2 mM H2O2 in the presence of 1 microM insulin induced DNA synthesis 20-24 h later at almost the same level as that in cells treated with 10% serum. Treatment with 0.1-0.2 mM H2O2 alone did not induce DNA synthesis and was not toxic to the cells. Cell cycle analysis indicated that treatment with H2O2 plus insulin induced progression of the cell cycle from the quiescent state. The amounts of mRNA for competence family genes such as c-fos, KC and JE were increased by the addition of H2O2. Under these conditions H2O2 caused rapid phosphorylation of a protein of 78 kDa with a pI of 6.3 (p78). Phosphorylation of p78 increased on treatment with TPA and serum as well. Catalase reduced the increase in phosphorylation of p78 induced by TPA and serum. Endogenous production of H2O2 was observed within 10 min after treatment of quiescent cells with platelet derived growth factor (PDGF) or 12-O-tetradecanoylphorbol-13-acetate (TPA). These results indicate that H2O2 at certain concentrations mimics the action of competence factors on resting Balb/3T3 cells.