Tyrosine kinases of the Src family are regulated via their Src homology 2 (SH2) and SH3 domains. The Nef protein of human immunodeficiency virus-1 (HIV-1) has previously been shown to bind with high affinity and specificity in vitro to the SH3 domain of Hck, a Src family member expressed primarily in myeloid cells. However, the effect of Nef on Hck activity in living cells is unknown. Here we show that Rat-2 fibroblasts co-expressing Hck and Nef rapidly developed transformed foci, whereas control cells expressing either protein alone did not. Nef formed a stable complex with Hck and stimulated its tyrosine kinase activity in vivo. Mutagenesis of the Nef proline-rich motif essential for SH3 binding completely blocked complex formation, kinase activation, and transformation, indicating that the Nef SH3-binding function is required for its effects on Hck. These results provide direct evidence that SH3 engagement is sufficient to activate a Src family kinase in vivo and suggest that Hck may be activated by Nef in HIV-infected macrophages.