We used myristylated and nonmyristylated c-src-based variants and phosphotyrosine-specific antibodies to reevaluate the role of tyrosine phosphorylation in cellular transformation by pp60src. Prior methods used to detect tyrosine-phosphorylated proteins failed to discriminate predicted differences in tyrosine phosphorylation which are clearly observed with phosphotyrosine-specific antibodies and Western blotting (immunoblotting). Here we report the observation of a 120,000-Mr protein whose phosphorylation on tyrosine correlates with the induction of morphological transformation. p120 was not observed in cells overexpressing the regulated, nononcogenic pp60c-src, whereas phosphorylation of p120 was greatly enhanced in cells expressing activated, oncogenic pp60527F. Furthermore, phosphorylation of p120 was not induced by expression of the activated but nonmyristylated src variant pp602A/527F, which is transformation defective. p120 partitioned preferentially with cellular membranes, consistent with the observation that transforming src proteins are membrane associated. Although a number of additional putative substrates were identified and partially characterized with respect to intracellular localization, tyrosine phosphorylation of these proteins was not tightly linked to transformation.