Morphological transformation of NIH 3T3 cells was observed following coexpression of a portion of the ras GTPase-activating protein (GAP) comprising the amino terminus (GAP-N) and a mutant of v-src (MDSRC) lacking the membrane-localizing sequence. Cells expressing either of these genes alone remained nontransformed. Coexpression of GAP-N with MDSRC did not alter the subcellular localization, kinase activity, or pattern of cellular substrates phosphorylated by the MDSRC product. In contrast to SHC, phospholipase C-gamma 1, and the p85 alpha phosphatidylinositol 3'-kinase subunit, the endogenous GAP product (p120GAP) was highly tyrosine-phosphorylated only in cells transformed by wild-type v-src. Furthermore, for transformation induced by wild-type v-src as well as by coexpression of MDSRC and GAP-N, a strict correlation was observed between cell transformation, elevated tyrosine phosphorylation of p62, p190, and a novel protein of 150 kDa, and complex formation between these proteins and p120GAP. As with cells transformed by wild-type v-src, the MDSRC plus GAP-N transformants remained dependent on endogenous Ras. The results suggest that tyrosine phosphorylation and complex formation involving p120GAP represent critical elements of cell transformation by v-src and that complementation of the cytosolic v-src mutant by GAP-N results, at least in part, from the formation of these complexes.