Abstract Background Marek’s Disease (MD) is a hyperproliferative, lymphomatous, neoplastic disease of chickens caused by the oncogenic Gallid herpesvirus type 2 (GaHV-2; MDV). Like several human lymphomas the neoplastic MD lymphoma cells overexpress the CD30 antigen (CD30hi) and are in minority, while the non-neoplastic cells (CD30lo) form the majority of population. MD is a unique natural in-vivo model of human CD30hi lymphomas with both natural CD30hi lymphomagenesis and spontaneous regression. The exact mechanism of neoplastic transformation from CD30lo expressing phenotype to CD30hi expressing neoplastic phenotype is unknown. Here, using microarray, proteomics and Systems Biology modeling; we compare the global gene expression of CD30lo and CD30hi cells to identify key pathways of neoplastic transformation. We propose and test a specific mechanism of neoplastic transformation, and genetic resistance, involving the MDV oncogene Meq, host gene products of the Nuclear Factor Kappa B (NF-κB) family and CD30; we also identify a novel Meq protein interactome. Results Our results show that a) CD30lo lymphocytes are pre-neoplastic precursors and not merely reactive lymphocytes; b) multiple transformation mechanisms exist and are potentially controlled by Meq; c) Meq can drive a feed-forward cycle that induces CD30 transcription, increases CD30 signaling which activates NF-κB, and, in turn, increases Meq transcription; d) Meq transcriptional repression or activation of the CD30 promoter generally correlates with polymorphisms in the CD30 promoter distinguishing MD-lymphoma resistant and susceptible chicken genotypes e) MDV oncoprotein Meq interacts with proteins involved in physiological processes central to lymphomagenesis. Conclusions In the context of the MD lymphoma microenvironment (and potentially in other CD30hi lymphomas as well), our results show that the neoplastic transformation is a continuum and the non-neoplastic cells are actually pre-neoplastic precursor cells and not merely immune bystanders. We also show that NF-κB is a central player in MDV induced neoplastic transformation of CD30-expressing lymphocytes in vivo. Our results provide insights into molecular mechanisms of neoplastic transformation in MD specifically and also herpesvirus induced lymphoma in general.