The RET/PTC3 oncogene arises from the fusion between the N-terminal encoding domain of the RFG gene and the tyrosine kinase encoding domain of RET receptor. RET/PTC3 is very frequent in papillary thyroid carcinomas, especially in children exposed to the Chernobyl accident. We have studied the functional consequences of the RFG-RET fusion. Here we show that the N-terminal coiled-coil domain of RGF mediates oligomerization and activation of the kinase and of the transforming capability of RET/PTC3. In addition, the RFG coiled-coil domain mediates a physical association between RET/PTC3 and RGF proteins, rendering RFG a bona fide substrate of RET/PTC3 kinase. Finally, we show that the coiled-coil domain of RGF is essential for the distribution of the RET/PTC3 protein at the membrane/particulate cell compartment level, where also most of the RFG protein is localized. We propose that fusion to the RFG coiled-coil domain provides RET kinase with a scaffold that mediates oligomerization and re-localization of the RET/PTC3 protein, a process that may be crucial for the signalling of this specific RET/PTC variant.