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The drug, N,N bis (ethylene)-P (1-adamantyl) phosphonic diamide inhibits focus formation of Rous Sarcoma Virus in tissue culture. Transformation of chick cells was inhibited when the drug was added to chick cells prior to infection. The drug did not inhibit the transformation of Normal Rat Kidney Cells infected with RSV, when the cells were grown at non-permissive temperatures and shifted to permissive temperatures upon addition of the drug. Nor did the drug revert cells transformed at permissive temperatures. These studies indicated that the inhibition of RSV is in the early stage of viral growth, possible penetration or uncoating.