The expression of polyomavirus large T antigen in stably transfected C2 myoblast cells inhibits terminal differentiation without inducing a transformed phenotype. In the present work, we report on the lifting of this inhibition by a mutation that prevents polyomavirus large T antigen from binding to the product of the retinoblastoma susceptibility gene (p105 RB). In contrast with cells containing wild-type large T, those with the Rb binding site mutant large T showed the same up-regulation of myosine heavy chain and myogenin mRNA expression as control cells. Furthermore, we correlate the cell cycle alteration induced by polyomavirus large T antigen expression with the inability of the cells to undergo terminal differentiation.