The v-fms oncogene of the McDonough strain of feline sarcoma virus (SM-FeSV) encodes a plasma-membrane-associated tyrosine kinase (gp140v-fms) which is closely related, both structurally and functionally, to the c-fms-specified receptor for the macrophage colony stimulating factor (CSF-1). In mammalian fibroblasts, the natural producers of CSF-1, expression of v-fms leads to cell transformation. To study the interaction between CSF-1 and gp140v-fms molecules in a cell system that does not produce endogenous cross-reactive CSF-1, we have expressed the entire v-fms gene as well as a nontransforming deletion mutant (SC2) in chicken embryo cells (CEC). For this purpose the avian retroviral vectors pDS3 and pREP, based on Rous sarcoma virus, were used to isolate recombinant virus particles. CEC infected with virus that carried the entire v-fms gene expressed high amounts of gp140v-fms, comparable to those in SM-FeSV transformed NRK cells. However, these CEC remained flat, retained their fibronectin network, and did not produce enhanced levels of plasminogen activator. The cells grew faster than control CEC for more than 8 weeks but failed to form colonies in soft agar. Within 2 days after addition of CSF-1 to the growth medium, a transformed cell phenotype was induced, as judged by loss of the fibronectin network, again with a growth rate fourfold faster than that of the parental cells and with colony formation in soft agar. Moreover, human CSF-1 caused a rapid tyrosine phosphorylation of v-fms molecules detectable within 5 min after addition of the growth factor. In contrast, CSF-1 had none of the above effects on cells that expressed the SC2 v-fms deletion mutant.