The vertebrate gene FER encodes two protein-tyrosine kinases with molecular weights of 51,000 and 94,000 and distinctive aminotermini. The larger kinase is expressed ubiquitously among vertebrate tissues, whereas expression of the smaller kinase appears to be limited to spermatogenic cells in the testes. Here we show that Drosophila melanogaster contains an apparent ortholog of FER (DFer) that also produces two mRNAs by separate initiation of transcription, and two proteins with molecular weights of 45,000 and 92,000. Both proteins are in part loosely associated with cytoplasmic membranes. Both can transform avian and rodent cells with roughly equal potency, when expressed from retroviral vectors. Fusing the myristoylation signal from the SRC protein-tyrosine kinase to the aminoterminus of the DFer protein increased the strength of attachment to membranes but augmented transformation only marginally. The results provide the first demonstration of neoplastic transformation by a protein-tyrosine kinase of Drosophila and by FER from any species. The products of Drosophila and vertebrate FER may be part of similar signaling pathways in the two species.