(FORTUNE Magazine) – John Sperling was in his office in Phoenix when he got the call. His longtime friend Lou Hawthorne was phoning to tell him that scientists at Texas A&M University had successfully cloned a cat, the first-ever genetically engineered pet. That was great news for Sperling, the sole funder of the project. Back in 1997, he and Hawthorne had selected a team of genetic experts and given them lots of money for research. In went Sperling's $4 million and out came a purring bundle of fur. Yet it wasn't exactly what the billionaire Arizona businessman had hoped for. In fact, Sperling wasn't all that excited by the news. What he'd really been wanting to do was clone his dog.

Missy, an affable 15-year-old mutt (three-quarters Border collie and a quarter Siberian husky), is the real reason the world now has a cloned cat. Sperling knows that when Missy dies he could simply get another dog, but he thinks that his chances of finding one just like her are slim. "She's an incredible athlete. Utterly courageous and fearless. She'll get on top of a cliff and cast herself off and somehow get to the bottom without killing herself. I've met a lot of dogs, but I've never seen anything remotely like that," says Sperling, who once got in his car and clocked Missy running at 35 miles per hour. "That was one of the episodes where John fell more deeply in love with her," recalls Hawthorne, a filmmaker and producer of interactive media who is the CEO of Genetic Savings & Clone, the company Sperling set up to oversee the so-called Missyplicity project. "When he stopped to let her in the car, her paws were bloody, and he saw that as an example of how much heart she has. She was giving it her all."

Like many pet owners, Sperling likes to think his dog is special. In moments of quiet longing, who hasn't wished his or her beloved pet were still alive or had ten more years to live rather than ten months? A few years ago the good people at the American Animal Hospital Association gave new insight into the depths of Americans' devotion to their pets when they revealed a survey showing that 37% of pet owners actually leave messages on answering machines for their cat or dog while they're out of town. While Sperling insists he's never done that, he does admit to doting on Missy excessively--he gives her daily drug and vitamin supplements designed especially for her. And he is, after all, trying to clone her.

Back in February, when Sperling showed the world his cloned cat and announced his plan for a business that would clone people's pets, he was condemned by many as an exploiter and an opportunist. Sperling didn't mind a bit--he never met an establishment he didn't want to rebel against. A partly self-educated dyslexic, an antibusiness tycoon, a left-leaning academic who founded a for-profit university, Sperling has spent most of his 81 years bucking convention. For almost all that span, few people noticed. Then suddenly, at age 73, Sperling became a very rich man when the company he founded went public. Since then he has been energetically funding projects like saltwater agriculture and the decriminalization of illegal drugs, and he promises that when he dies, he will leave his fortune to a foundation for funding unpopular causes. Says Sperling: "I don't want to waste my time investing in popular things. Anyone can go and give money for kids' literacy and things like that, but how many people are going to invest in unpopular things?"

That attitude puts him squarely in the grand tradition of eccentric American rich guys who use their wealth to pursue quixotic agendas, like Ed Bass, who built the infamous Biosphere, and Joe Firmage, the tech entrepreneur who funds research on aliens. But unlike them, Sperling came from nothing and can't forget how life looked at the bottom; he's interested in addressing what he sees as social injustice and the hypocrisies of the rich and powerful. "He's always supported the underdog because he used to be one and because he's been bruised and beaten up by those who weren't," says his friend Jorge Klor de Alva, who has known Sperling for 30 years.

Even though Sperling spent 25 years as an academic believing that corporations were "terrible"--little more than environmentally destructive, morally bankrupt agents for the enrichment of top executives--now he's chairman of a $6 billion public corporation. When the holding company of the University of Phoenix (UOP), the for-profit school for working adults he started in the '70s, went public in 1994, he netted $320 million. Today he's worth about $1 billion, thanks to continued growth--the UOP currently has 140,000 students in 22 states and revenues of about $900 million--and the successful IPO of the online division in 2000.

Short and slight, with a round, sturdy face topped by ample amounts of curly hair, Sperling doesn't come close to either looking or acting his age. Twice divorced and single for the past 37 years, at 81 he's working as feverishly as most people do at 50. He gets up every day at 5:30 a.m. to do some combination of hiking, weight training, and jogging on a treadmill, then moves to a large, airy home office adjoining the sprawling Tuscan-style villa in Phoenix he bought a few years ago. There he spends his days e-mailing and talking with business partners for his various ventures.

Sperling is constantly dreaming up new ideas. The notion of cloning, for instance, came to him at his weekend home in San Francisco one morning five years ago when he and Hawthorne were having breakfast. They were in the middle of a discussion about Dolly the sheep, which had just been cloned by scientists in Edinburgh, Scotland, when Sperling looked around the room, saw Missy lying happily on the floor, and joked, "Hey, we should clone Missy." Two seconds later he thought, Wait, why not? And just like that he charged Hawthorne with a fact-finding mission. "I gave John a very simple report that said it would cost at least $2 million for at least two years, and it would require some of the best scientists in the world, with no guarantees of success," says Hawthorne, who figured that would be the end of it. To his surprise, Sperling said, "Okay, go ahead."

To lead the project, Hawthorne selected experienced cloning researcher Dr. Mark Westhusin at Texas A&M. Since the summer of 1998, Westhusin and his 30-person team have run through Sperling's original $2 million, plus $2 million more. Sperling has invested another $6 million in GS&C to create a for-profit cloning farm so that other people can clone their pets too. The technology and scientific techniques to do that don't exist yet, but when they do--and all indications from the advancing march of science seem to suggest they will--GS&C will be ready with a 2,700-acre animal colony and a fully automated, robotic cloning factory. It's a vision of the future that makes some people shudder, including the folks at the Humane Society, PETA, and the ASPCA, but Sperling isn't concerned. "Oh, come on," he says. "Aren't there more important things in the world to fret over? Pet cloning isn't hurting anyone."

The son of a Missouri sharecropper, Sperling lived a meager and rather miserable childhood. His father was a wandering ne'er-do-well who beat him. "[The day my father died] was the happiest of my life," he wrote in his 2000 autobiography, Rebel With a Cause. After graduating from high school in 1939, Sperling joined the Merchant Marine, where, on ships sailing around the world, he continued his education on his own. At age 18, dyslexic and still mostly illiterate, he borrowed books from shipmates and taught himself to read. Poring through novels like Tom Jones, Notes From the Underground, and The Great Gatsby, Sperling fell in love with the process of education, a love that would last his entire life.

Soon after he left the Merchant Marine, Sperling paid his way through Reed College in Portland, Ore., by working part-time at a shipyard. He then enlisted in the Army Air Corps and used the GI Bill to get a master's degree in English history from the University of California at Berkeley. Still not sure what he wanted to do with his life, Sperling collected a Ph.D. in economic history from Cambridge University and decided to go into teaching. After several gigs in the Midwest, he became a tenured humanities and history professor at San Jose State, where he developed a reputation as a rebel, organizing a teachers' union and advocating strikes.

Sperling loved the interaction with students but began to tire of the culture of academia and the dinner parties of "lousy wine and tuna-and-macaroni casseroles" at professors' houses. He also disliked the idle complacency of it all. "There wasn't enough action. I like to apply concepts to the world, and that's awfully hard to do in academia," says Sperling.

Then one day in 1972 he got an opportunity that was to change his life. He was picked to run a federally funded series of classes at San Jose State to help local police and schoolteachers deal with juvenile delinquents. To his surprise, Sperling found the students exceptionally eager to learn. Many of the teachers wanted master's degrees, and the police officers wanted college degrees. But there were very few degree-granting programs for adults who worked during the day. Itching for something new to do, Sperling took a proposal for an expanded, degree-granting program for working adults to the academic vice president at San Jose State. When the vice president rejected the idea, Sperling quit his post and went looking elsewhere.

Sperling found an eager collaborator in a financially troubled school, the Jesuit-run University of San Francisco. On the advice of one of the university's deans, Sperling organized the program as a for-profit company, a move he never would have considered on his own, given his views about corporations. Allen Calvin, the USF dean who became something of a mentor to Sperling, helped expand his perspective. The only way for the school, then called the Institute for Professional Development, to grow and innovate, Calvin said, was to throw it into the marketplace as a corporation.

Enrollment in USF's adult learning program took off. Some of the early ideas Sperling applied to adult education--interactive, peer-led learning groups, teachers with experience in their fields, and emphasis on information you can use on the job over abstract understanding of things like literature and political theory--are still central to the UOP curriculum. But they're things that make the school highly unconventional. Regulators in the '70s didn't like the way Sperling stripped down education to its most utilitarian levels, and to some extent they still don't.

Kay Anderson, who in the 1970s ran the Western Association of Schools and Colleges, the regional accrediting body for California, felt that the IPD was academically anemic, a diploma mill of sorts. He became Sperling's biggest nemesis, threatening to revoke USF's accreditation and eventually running him out of California and into Phoenix, a place Sperling chose because it fell under the jurisdiction of what he felt were more progressive regulators. Sperling says that the academic rigor of the school has increased over the years, but he defends group learning. "For a long time the accrediting agencies were convinced that group assignments were cheating. But it's self-disciplining. You have to trust students just as you trust your employees," he says.

Shortly after arriving in Arizona in 1977, the renamed University of Phoenix won accreditation. But the battles continued. Every time Sperling wanted to expand his unique brand of adult education into a new state, which was often, he ran into hostile state licensing agencies. Sometimes he'd get creative and do end runs around the regulators, schmoozing with state legislators and persuading them to propose laws that would allow him to operate in their state without the approval of education authorities. By the mid-'90s, most state licensing boards had given up trying to fight the UOP's entry.

In 1994, Sperling formed a holding company called Apollo Group to take the UOP public. After Apollo's IPO that December (Sperling kept 30% of the shares), the stock began a steady climb. Investors liked the University of Phoenix's high margins (current operating margins are 21%; profit margins, 15%) and efficient business model. At about $10,000 a year, UOP tuition isn't cheap. And because the school lacks expensive buildings like gyms, dorms, libraries, science labs, and student unions (students gather for classes between 6 p.m. and 10 p.m. in rented office space), its costs are much lower than those of traditional universities. Over the past 12 months alone, the stock has risen 70%.

Strangely enough, all of Sperling's success made him feel a little bored, which he hates more than anything. "Everything he does is a flight from boredom," says his only child, Peter, 43, an Apollo board member who owns 13% of the stock. Sperling started looking for a political cause he could get involved in. Fighting regulators and dealing with state legislators had taught him he had a passion for politics. "If I were my son's age, I'd go buy myself a Senate seat," he says, completely serious.

Since he isn't 43, Sperling took a different route. Two weeks after the IPO, while in a meeting with Sam Vagenas, Arizona's former deputy secretary of state, Sperling blurted out, "What about drug law reform?" Since the Reagan and Bush Administrations, Sperling had been compiling a file of newspaper clippings on the war on drugs--stories about the $19 billion taxpayers spend every year, editorials about the lack of success in stemming the drug trade, and lots of statistics about the disproportionate numbers of black and Hispanic men in prison for drug offenses. "The war on drugs is a war against the minority poor," he told Vagenas. "And it's a welfare program for cops."

So Sperling, along with George Soros and Peter Lewis, the billionaire chairman of Progressive Corp., began to underwrite a state-by-state campaign to decriminalize illegal drugs, which means replacing prison time with treatment. The achievements so far have been impressive. Thanks to 17 successful state ballot initiatives that Sperling paid to advertise and get petitions for, it's now almost impossible to go to jail in states like Arizona and California for using or possessing marijuana. "When we first started this, being for drug reform was like saying you've gone and joined the Man-Boy Love Association," chuckles Sperling, who was first introduced to marijuana during a bout with prostate cancer in the mid-'60s but now says his personal drug use is "very limited."

Sperling doesn't like to think of himself as a do-gooder, but he's clearly interested in social reform. Part of the reason he's plowed $10 million into saltwater agriculture is that he believes it will help restore the economy of a poor country on the eastern coast of Africa. Seaphire, the company Sperling has funded, is operating a huge farm along the coast of Eritrea that's irrigated exclusively by seawater--a far more plentiful resource than freshwater. The idea is to turn barren, seemingly unusable desert into moneymaking and ecologically sustainable land. The crop is a crispy, bright green plant called salicornia that's eaten in Europe as a garnish or in salads and also produces an edible and versatile oil that Seaphire CEO Roy Hodges thinks has great potential for generating revenue. Sperling is also funding research on genetically modified seeds that could allow farmers to grow crops like tomatoes and grain using saltwater. Biotech and agriculture experts say that in theory such an idea holds great promise.

Sperling is also interested in benefiting himself, of course. Kronos, the anti-aging clinic in Phoenix, was born mostly out of Sperling's desire to extend his own life. It's one of the half-dozen most sophisticated anti-aging clinics in the nation, and Sperling expects it to begin turning a profit later this year. Patients pay roughly $3,000 to get a complete picture of their health, including results from 150 different tests that identify their weaknesses and deficiencies. "People who live to be really old age uniformly, and then at some point their whole system shuts down and they die. But that's not the case with most of us. We're subjected to the weakest link, and we die of one particular thing," says Sperling. Strengthen the weak links, the thinking goes, and you'll live healthier longer. Kronos doctors and nutritionists do that by giving patients personalized daily drug and vitamin supplements concocted by Kronos' pharmacy in Las Vegas. Sperling, for instance, takes 23 pills a day.

Several months ago Sperling was in Genetic Savings & Clone's lab in College Station, Texas, meeting with Westhusin. It's a vast, 7,000-square-foot space that Sperling's team intends to turn into an automated facility capable of producing 1,000 embryos an hour. Inside one room sits a shiny metal cylinder filled with liquid nitrogen. Swimming in the nitrogen, encased in tiny glass tubes, are tissue samples from dead pets that hundreds of people have sent in from around the country, awaiting the day when a small slice of DNA can be used to clone genetic offspring. When that day dawns, the cells will be used to create embryos that will then travel to a nearby ranch where pregnant dogs and cats roam. There, cloned animals will be born and shipped to their owners. It's an operation Sperling hopes will be enormously profitable, tapping into the vast desire people have to, in some sense, bring their favorite pets back to life.

But today cloning is still an imperfect science. Westhusin and his team have created more than 100 cloned embryos that were transferred to the wombs of 80 dogs, but the furthest they got was one pregnancy that went to 38 days. Dogs, it turns out, are the hardest mammals to clone. So, nearly four years later, there's still no little Missy. "We know that [animal] cloning is possible, but how to replicate it is something else," says Sperling. "That's a couple of years at the very minimum. We were just lucky with the cat."

In other words, when Missy is finally cloned, it's unlikely that Sperling will have as many years with his new dog as he'd like. Though he's completely healthy at the moment, "I don't think I'll live much more than another ten years. The odds are completely against it," he says. And there are no guarantees that if a puppy does come it will be perfectly healthy. Poor 5-year-old Dolly has arthritis. But Sperling will take what he can get. "He would consider it a triumph just to see the puppy in his arms," says Hawthorne.

FEEDBACK: mwarner@fortunemail.com