The v-sis oncogene product p28v-sis and the platelet-derived growth factor (PDGF) B chain share 92% homology with each other and over 50% homology with the PDGF A chain. Exogenously added homodimers of PDGF A and PDGF B and of p28v-sis are potent mitogens but only PDGF B and p28v-sis induce transformation when endogenously expressed with a strong promoter. Because exogenous PDGF AA and PDGF BB both initiate a full mitogenic response, understanding the mechanisms underlying the difference in their transforming potential may clarify how growth factor genes act as oncogenes. In this work, we compared cells expressing high levels of PDGF A and v-sis. We observed that transformation by v-sis correlated directly with the rapid degradation (t1/2 approximately 20 min) of the alpha and beta PDGF receptors, with a failure of either the alpha or beta receptor to be fully processed and with the association of high levels of phosphatidylinositol (PI) 3-kinase with immunoprecipitates of the PDGF receptors. In contrast, in cells expressing essentially equal levels of PDGF A, transformation was not detected, alpha and beta PDGF receptor processing was normal, and association of PI 3-kinase with receptors in immunoprecipitates was not found above control values. The ability of v-sis to autoactivate PDGF receptors within processing compartments and to initiate activation of the PI 3-kinase signaling pathway coupled with the failure of PDGF A to activate its receptor intracellularly and to induce transformation when endogenously expressed at high levels suggests that the internal autoactivation of PDGF receptors may be essential for transformation by v-sis.