Fujinami sarcoma virus (FSV) encodes a 140,000-dalton transforming protein, P140, which contains gag- and fps-specific sequences. The cellular localization of this protein was examined by fractionation of [35S]methionine-labeled, FSV-infected chicken embryo fibroblasts. In homogenates of cells infected by wild-type, temperature-resistant FSV prepared in either hypotonic or isotonic buffer, 60 to 80% of the P140 was particulate. Isopycnic separation on discontinuous sucrose gradients indicated that the majority of the particulate P140 was present in a light membrane fraction enriched for plasma membranes. Much of the particulate P140 could be solubilized by the addition of 0.6 M salt to a postnuclear supernatant, suggesting that P140 is not an integral membrane protein. Particulate P140 may be associated with membranes either directly as a peripheral membrane protein or indirectly via cytoskeletal elements. In cells infected by mutants of FSV temperature sensitive for cellular transformation, most of the P140 is particulate at the permissive temperature, whereas most is soluble at the nonpermissive temperature; this change in distribution is not a secondary consequence of the change in cellular phenotype, since it also occurs in nonconditionally transformed cells doubly infected with temperature-sensitive FSV and wild-type Rous sarcoma virus. The movement of P140 from the particulate to the soluble fraction occurs rapidly when cells infected by temperature-sensitive FSV are shifted from the permissive to the nonpermissive temperature. Furthermore, P140 moves from the soluble to the particulate fraction, although somewhat more slowly, when cells are shifted from the nonpermissive to the permissive temperature. These observations suggest that the association of P140 with plasma membranes or the cytoskeleton may play a role in transformation by FSV.