Two isoforms of Eps8, p97Eps8 and p68Eps8, have been identified as the substrates for receptor tyrosine kinases. Our previous studies indicated that both tyrosyl phosphorylation and protein expression of Eps8 were elevated in v-Src transformed cells. In an attempt to examine the role played by p97Eps8 in tumorigenesis, we have first obtained cells overexpressing p97Eps8 and its pleckstrin homology (PH)-truncated variant. We then demonstrated that cells overexpressing p97Eps8 not only exhibited the ability of focus formation in cell culture but also promoted the tumor formation in mice as compared to controls. Furthermore, elevated serum-induced extracellular responsive kinase (ERK) activation was observed in p97Eps8 overexpressors. This enhanced ERK activation was sensitive to a MEK1 specific inhibitor PD98059 and was important for p97Eps8-mediated transformation, since transfection of vectors expressing dominant negative MEK1 and p97Eps8 abrogated focus formation by p97Eps8. In contrast, PH-truncated p97Eps8 failed to localize at the plasma membrane and that the truncated variant also did not elevate ERK activation and cellular transformation in response to serum stimulation. Our results thus indicated that: (i) the gene encoding p97Eps8 was an oncogene; (ii) p97Eps8-induced oncogenesis was partly mediated by ERK activation; and (iii) the PH domain of p97Eps8 was critical for its cellular localization, ERK activation and its ability to transform cells. Oncogene (2001) 20, 106 - 112.