In this study, we examined the molecular mechanism of erythropoietin-initiated signal transduction of erythroid differentiation through Src and phosphatidylinositol 3-kinase (PI3-kinase). Antisense oligonucleotides against src but not lyn inhibited the formation of erythropoietin-dependent colonies derived from human bone marrow cells and erythropoietin-induced differentiation of K562 human erythroleukaemia cells. Antisense p85alpha oligonucleotide or LY294002, a selective inhibitor of PI3-kinase, independently inhibited the formation of erythropoietin-dependent colonies. In K562 cells, Src associated with PI3-kinase in response to erythropoietin. Antisense src RNA expression in K562 cells inhibited the erythropoietin-induced activation of PI3-kinase and its association with erythropoietin receptor. PP1, a selective inhibitor of the Src family, reduced erythropoietin-induced tyrosine phosphorylation of erythropoietin receptor and its association with PI3-kinase in F-36P human erythroleukaemia cells. The coexpression experiments and in vitro kinase assay further demonstrated that Src directly tyrosine-phosphorylated erythropoietin receptor, and associated with PI3-kinase. In vitro binding experiments proved that glutathione S-transferase-p85alpha N- or C-terminal SH2 domains independently bound to erythropoietin receptor, which was tyrosine-phosphorylated by Src. Taken together, Src transduces the erythropoietin-induced erythroid differentiation signals by regulating PI3-kinase activity.