We previously isolated a novel human transforming gene from a primary stomach cancer and identified it as an activated version of the c-raf-1 gene which is the human homologue of v-raf, a viral oncogene encoding a serine/threonine-specific protein kinase. Analyses of cDNA and genomic clones of this gene revealed that it was generated by substitution of 5'-sequence (exons 1-5) of the normal c-raf-1 gene with an unrelated human sequence. We identified the region in the genomic clone where the rearrangement had occurred. The rearranged EcoRI fragment was detected in all the primary transformants obtained from two independent transfections, suggesting that the recombination had occurred in the primary cancer. By sequence analysis of cDNA, the putative product of the transforming gene was inferred to have a hydrophobic stretch ahead of the ser/thr-protein kinase domain of the c-raf-1 gene product. We introduced one of the cDNA which contains the 1.6-kb open reading frame into the pUC9 vector. An autophosphorylating, 58 kd protein was induced in Escherichia coli cells bearing the plasmid upon induction. Since ser/thr-protein kinase activity of the normal c-raf protein has not been evidenced, these results suggest that the truncation/replacement of the amino-terminal domain of the c-raf-1 protein leads to constitutive activation of the protein kinase probably residing on the downstream domain.