The v-fms oncogene is capable of producing tumors in vivo and transforming cells in culture; in contrast, the c-fms proto-oncogene is nontransforming. In this report we present the complete nucleotide sequence of a feline c-fms cDNA, the progenitor of the v-fms oncogene. Comparison of this sequence with that of v-fms shows that the proteins encoded by these two genes differ by nine amino acid substitutions and the replacement of 50 C-terminal amino acids present in c-fms by 11 unrelated residues in v-fms. Using chimeric fms genes and site-directed mutagenesis, we have determined that the C-terminal modification present in v-fms is sufficient to generate a partially transforming phenotype, but that mutations at amino acid positions 301 and 374 are required (in addition to the C-terminal modification) to generate a fully transforming fms gene.