Avian sarcoma virus (ASV) induces sarcomas in animals and transforms fibroblasts to a neoplastic state in cell culture. A single viral gene (src) is responsible for both the induction and maintenance of neoplastic transformation. Recent work has identified a protein with a molecular weight of 60,000 daltons that is apparently encoded in src and may be the effector molecule for the gene (Brugge and Erikson, 1977; Purchio et al, 1978). The putative product of src can be immunoprecipitated by antisera obtained from rabbits bearing tumors induced by ASV. We have used this approach to isolate the protein to characterize further its genetic origins and possible function. Our rabbit tumor antisera precipitated a protein with a molecular weight of 60,000 daltons; according to serological, biochemical and genetic criteria, this protein is encoded in src. We found that this protein is phosphorylated and therefore denoted it pp60. Phosphorylation of pp60 could be accomplished in vitro with extracts of ASV-infected cells. A temperature-sensitive conditional mutation in src had no demonstrable effect on either the production or stability of pp60 in the infected cell, but phosphorylation of the protein was temperature-sensitive. Since the mutant src is not expressed at the restrictive temperature, our findings raise the possibility that phosphorylation of pp60 is required for its function as the putative effector of src. Immunoprecipitates prepared with extracts of ASV-infected cells and the rabbit tumor antisera contained a protein kinase activity that catalyzed phosphorylation of the heavy chains of immunoglobulin molecules, using either ATP or GTP as phosphate donor. The kinase activity immunoprecipitated in parallel with pp60 was obtained only from cells that contained a functioning product of src and could not be precipitated with antisera directed against structural proteins of ASV. A temperature-sensitive conditional mutation in src caused the kinase activity to be thermally inactivated in vitro far more rapidly than the activity from cells infected with wild-type virus. We conclude that both the protein kinase and pp60 are encoded in src, and that the enzymatic activity may be an intrinsic property of pp60. Phosphorylation of pp60 in cellular extracts was inhibited by calcium ion, whereas the immunoprecipitable kinase activity was not, suggesting that the kinase responsible for pp60 phosphorylation may be distinct from that encoded in src. Collett and Erikson (1978) have also identified a protein kinase activity associated with pp60. These findings raise the possibility that phosphorylation of specific cellular targets might account for transformation of the host cell by src.