Exposure of dexamethasone-treated cells of the mT-1 line of F111 rat cells bearing a dexamethasone-inducible polyoma virus middle T (mT) antigen gene to very low concentrations of the protein kinase C-stimulating phorbol ester TPA increased the association of mT antigen with the cellular pp60c-src tyrosine protein kinase, as indicated by an increased phosphorylation of tyrosine residues of mT in mT:pp60c-src complexes precipitated from extracts of the TPA-treated cells by anti-mT antibodies. This TPA (hence probably protein kinase C)-enhanced association of mT with pp60c-src was accompanied by a large increase in the transforming ability of mT as indicated by a much enhanced ability of TPA-treated mT-1 cells producing submaximal levels of mT to proliferate while suspended in semi-solid medium and to form foci on confluent monolayers of normal F111 cells. NRCC NO: 26558.