A 13-kilobase EcoRI genomic restriction fragment containing the human c-fps/fes proto-oncogene locus was expressed transiently in Cos-1 monkey cells and stably in Rat-2 fibroblasts. In both cases, human c-fps/fes directed synthesis of a 92-kilodalton protein-tyrosine kinase (p92c-fes) indistinguishable from a tyrosine kinase previously identified with anti-fps antiserum which is specifically expressed in human myeloid cells. Transfected Rat-2 cells containing approximately 50-fold more human p92c-fes than is found in human leukemic cells remained morphologically normal and failed to grow in soft agar. Synthesis of p92c-fes in this phenotypically normal line exceeded that of the P130gag-fps oncoprotein in a v-fps-transformed Rat-2 line. Despite this elevated expression, human p92c-fes induced no substantial increase in cellular phosphotyrosine and was not itself phosphorylated on tyrosine. In contrast, p92c-fes immunoprecipitated from these Rat-2 cells or expressed as an enzymatically active fragment in Escherichia coli from a c-fps/fes cDNA catalyzed tyrosine phosphorylation with an activity similar to that of v-fps/fes polypeptides. Thus, p92c-fes is not transforming when ectopically overexpressed in Rat-2 fibroblasts. This lack of transforming activity correlates with a restriction imposed on the kinase activity of the normal c-fps/fes product in vivo which is apparently lifted for v-fps/fes oncoproteins, suggesting that regulatory interactions within the host cell modify fps/fes protein function and normally restrain its oncogenic potential.