In a previous study, activated rat c-raf was detected by an NIH 3T3 cell transfection assay, and a rearrangement was demonstrated in the 5' half of the sequence of the gene. In the present study, the cDNAs of normal and activated rat c-raf were analyzed. Results showed that the activated c-raf gene is transcribed to produce a fused mRNA, in which the 5' half of the sequence is replaced by an unknown rat sequence. This mRNA codes a fused c-raf protein. The normal and activated c-raf cDNAs were each connected to the long terminal repeat of Rous sarcoma virus and transfected into NIH 3T3 cells. Only the activated form had transforming activity. We conclude that the rearrangement is responsible for the activation of c-raf.