Snyder-Theilen feline sarcoma virus (ST:FeSV)-transduced human fibroblasts differentiate into tissue macrophages with many of the properties of normal macrophages. These cells express high levels of the gag-fes tyrosine kinase fusion protein, p85(v-fes), and exhibit an elevated level of tyrosine phosphorylation. Expression of the macrophage phenotype is accompanied by increased levels of DNA-binding activity and nuclear accumulation of wild-type p53. The DNA-binding activity of the transcription factors Egr-1, CREB and Sp1, which are known to be involved in cell differentiation, is also increased in ST:FeSV-induced macrophages. These observations suggest that v-fes can activate signal transduction pathways normally involved in macrophage differentiation, and that transcription factors such as p53, further facilitate v-fes-induced terminal differentiation.