We have previously found that Rous sarcoma virus variants in which the viral src (v-src) gene is replaced by the cellular src (c-src) gene have no transforming activity. In this study, we analyzed the basis for the inability of the p60c-src overproduced by these variants to transform cells. Phosphorylations of tyrosine residues in total cell protein or in cellular 34K protein are known to be markedly enhanced upon infection with wild-type Rous sarcoma virus. We found that these tyrosine phosphorylations were only slightly increased in the c-src-containing virus-infected cells, whereas both levels were significantly increased by infection with wild-type Rous sarcoma virus, or transforming mutant viruses which are derived from c-src-containing viruses by spontaneous mutation. Phosphorylation at tyrosine 416 of p60 itself was also extremely low in overproduced p60c-src and high in p60s of transforming mutant viruses. In immunoprecipitates with monoclonal antibody, the overproduced p60c-src had much lower casein tyrosine kinase activity than did p60v-src. We previously showed that p60 myristylation and plasma membrane localization may be required for cell transformation. p60c-src was similar to transforming p60s in these properties. These results strongly suggest that the low level of tyrosine phosphorylation by overproduced p60c-src accounts for its inability to transform cells.