Transformation of chicken cells by Rous sarcoma virus (RSV) requires the functional expression of the viral src protein, a tyrosine protein kinase, pp60src. Variants of RSV containing deletions within the amino terminal one-third of the src protein have been identified that exhibit either temperature-sensitive or transformation-defective phenotype when used to infect chicken embryo cells. To define the regions within the amino terminal portion of pp60src that influence morphological transformation, a series of overlapping deletion mutations in the src gene of Prague A RSV (Pr A RSV) were constructed and their biological and biochemical properties were analyzed. Deletions within the src gene which remove amino acid residues 38 to 142 had minimal effects on the ability of the mutant viruses to induce cellular transformation. However, deletions, which impinged upon the region of the src gene encoding residues 142 to 169, inhibited cellular transformation. A variant containing a deletion of amino acid residues 169 to 225, was temperature sensitive for transformation. Structurally altered src proteins recovered from cells infected with transformation-defective variants exhibited a somewhat reduced tyrosine protein kinase activities when assayed in the immune complex kinase assay. Analysis of the in vivo phosphorylation of a pp60src substrate, the 36-kDa protein, revealed virtually wild-type levels of phosphorylation in cells infected with the transformation-defective mutants. These studies suggest that the region of the Pr A RSV src protein delineated by amino acid residues 142 to 169 is essential for initiation and maintenance of morphological transformation of chicken cells in culture.