To understand the role of endogenous AP-1 activity in cellular transformation induced by oncogenes, we have made use of a fos mutant (supfos-1) and a jun mutant (supjun-1), either of which can function as a transdominant inhibitor of AP-1-mediated transcriptional regulation. Chicken embryo fibroblasts (CEF) infected with a series of transforming retroviruses were doubly infected with retrovirus carrying supfos-1 or supjun-1, and suppression of cellular transformation was monitored in terms of reversion to normal cellular morphology or acquisition of anchorage-dependent growth. Cellular transformation induced by several exogenously expressed transforming genes of the fos or jun family was efficiently suppressed, as expected. CEF transformed by v-src, v-yes, v-fps, c-Ha-ras, and N-terminally truncated c-raf were also induced to revert to the normal phenotype by these transdominant mutants, suggesting that functional transcription factor AP-1 activity is essential for the cellular transformation induced by these oncogenes. The suppression is not attributable to nonspecific inhibition of cellular proliferation, because CEF transformed by v-ros or v-myc were not induced to revert to the normal phenotype. We next analyzed changes in all known components of chicken AP-1 induced by v-src, c-Ha-ras, or activated c-raf transformation. The levels of both Fra-2 and c-Jun expression were elevated two- to fourfold, and hyperphosphorylation of Fra-2 was also observed. We further showed that Fra-2-c-Jun heterodimer is mainly responsible for the elevated AP-1 DNA-binding activity in these transformed cells, and we propose that this heterodimer play a crucial role in the transformation induced by these oncogenes.