Active, wild-type v-Src and its kinase-dead double Y416F-K295N mutant were expressed in hamster fibroblasts. Expression of the active v-Src induced activation of endogenous c-Src and increased general protein-tyrosine phosphorylation in the infected cells. Expression of the kinase-dead mutant induced hypophosphorylation of Tyr416 of the endogenous c-Src. The inactivation of c-Src was reversible, as confirmed by in vitro kinase activity of c-Src immunoprecipitated from the kinase-dead v-Src-expressing cells. Both activation and inactivation of c-Src may be explained by direct interaction of the v-Src and c-Src that may either facilitate transphosphorylation of the regulatory Tyr416 in the activation loop, or prevent it by formation of transient dead-end complexes of the Y416F-K295N mutant with c-Src. The interaction was also indicated by co-localization of v- and c-Src proteins in immunofluorescent images of the infected cells. These results suggest that dimerization of Src plays an important role in the regulation of Src tyrosine kinase activity.