Expression of a receptor for human macrophage-colony stimulating factor (M-CSF or CSF-1), containing a point mutation which changes an aspartate to a valine at position 802 of the activating loop of the kinase domain, potently transforms the haemopoietic cell line FDC-P1 yet prevents Rat-2 fibroblast transformation. In order to understand this apparent paradox, aspartate 802 was changed by cassette mutagenesis to each of the other 19 amino acids. All hydrophobic amino acid substitutions were transforming when tested in FDC-P1 cells yet inactivating when tested in Rat-2 fibroblasts. These same amino acid substitutions also activated receptor degradation, strongly suggesting a causal relationship between receptor degradation and inactivation in fibroblasts. Point mutations or small deletions of Y708 within the kinase insert region of the mutant D802V receptor partly inhibited receptor degradation. The more stable D802V receptor derivatives were able to transform both FDC-P1 cells and Rat-2 fibroblasts, so establishing that the cell specific effect of the c-fmsD802V activating loop mutation is attributable to receptor degradation which accompanies kinase activation and prevents the transformation of Rat-2 but not of FDC-P1 cells.