In a recently discovered class of oncogenes, GTPase-inhibiting mutations constitutively activate alpha subunits of signal-transducing guanine nucleotide-binding proteins (G proteins). Somatic mutations in a subclass of endocrine tumors are found in the arginine-179 codon of the alpha subunit of Gi2 (alpha i2), creating the putative gip2 oncogene. We have tested the ability of gip2 to mediate neoplastic transformation of Rat-1 and NIH 3T3 fibroblasts in tissue culture. Expression of a mutant alpha i2 cDNA encoding cysteine in place of arginine-179 (alpha i2-R179C) caused Rat-1 cells to grow to a higher density in monolayer culture, to lose anchorage dependence, and to form tumors when injected subcutaneously into nude mice. In contrast, expression of alpha i2-R179C failed to alter growth or tumorigenicity of NIH 3T3 cells. We conclude that gip2 is an oncogene, by the criterion that it induces neoplastic transformation of Rat-1 cells. Failure of gip2 to transform NIH 3T3 cells is in keeping with clinical indications that gip2 is a tissue-selective oncogene.