Polyoma virus middle T-antigen converts normal fibroblasts to a fully transformed, tumorigenic phenotype. It achieves this, at least in part, by binding and activating one of the non-receptor tyrosine kinases, pp60c-src, pp62c-yes or pp59c-fyn (reviewed in refs 2 and 3). As a result, middle T-antigen itself is phosphorylated on tyrosine residues, one of which (Tyr 315) acts as a binding site for the SH2 domains of phosphatidylinositol-3'OH kinase 85K subunit. Here we show that another tyrosine phosphorylation site in middle T-antigen (Tyr 250; refs 4, 5) acts as a binding region for the SH2 domain of the transforming protein Shc. This results in Shc also becoming tyrosine-phosphorylated and binding to the SH2 domain of Grb2 (ref. 10). This probably stimulates p21ras activity through the mammalian homologue of the Drosophila guanine-nucleotide-exchange factor Sos (reviewed in ref. 11). We suggest that middle T-antigen transforms cells by acting as a functional homologue of an activated tyrosine kinase-associated growth-factor receptor.