Src is a nonreceptor tyrosine kinase that coordinates responses to diverse soluble and adhesive signaling molecules and regulates cell proliferation, survival, differentiation and migration. Normally, Src activity is tightly regulated, and Src-catalyzed phosphorylation is counterbalanced by phosphotyrosine phosphatases. However, deregulated mutant Src causes malignant transformation when highly expressed. Src transformation is dose dependent, but it has been unclear how much mutant Src, compared with endogenous Src, is required for transformation. Here, we show that transformation requires high-level overexpression of mutant src mRNA, in part because active Src protein is degraded by ubiquitin-mediated proteolysis. We show that active but not inactive Src protein is downregulated depending on the putative tumor suppressor and E3 ubiquitin ligase component, Cullin-5 (Cul5). Cul5 removal synergizes with physiological levels of mutant src mRNA to increase protein tyrosine phosphorylation, induce morphological transformation, and deregulate growth. Cul5 also represses Src-induced tumorigenesis and regulates Src signaling in normal cells. These results suggest that, when Src is activated by mutation or physiological mechanisms, its effects are limited by Cul5, which downregulates active Src and its phosphorylated substrates. These findings demonstrate the importance of a new mechanism that downregulates Src signaling in cells.