The transforming protein (pp60src) of the Rous sarcoma virus (RSV) is a phosphoprotein with the enzymatic ability to phosphorylate tyrosine in protein substrates. Previous work has indicated that the bulk of pp60src may be attached to the plasma membrane of infected cells. In an effort to better understand the mechanism by which pp60src induces the neoplastic phenotype, we have characterized further the attachment of pp60src to the plasma membrane, and we have identified separate molecular domains that are responsible for the attachment to membranes and for the protein kinase activity. Our results indicate that pp60src may be an integral membrane protein that is nevertheless synthesized on soluble polyribosomes. Subsequent to its synthesis, the protein attaches to plasma membrane without concomitant cleavage of a signal polypeptide. The amino-terminal quarter (or some portion thereof) of pp60src anchors the protein to the plasma membrane by forces that can be disrupted only with detergents. By contrast, protein kinase activity is located in the carboxyl-terminal half of the molecule. It appears that pp60src is designed on the one hand for tethering to the plasma membrane and on the other hand for enzymatic activity beyond the confines of the membrane. The fact that pp60src is but one of at least four different viral transforming proteins located on the plasma membrane implies that neoplastic transformation may commonly originate in events that occur at the periphery of the cell.