Oncogenesis by avian sarcoma virus is attributable to a single viral gene (src) which encodes a phosphoprotein (pp60src) with the enzymatic activity of a protein kinase. A closely related protein, pp60proto-src, occurs in uninfected cells from a wide variety of vertebrate species and is presumed to be the product of a cellular gene that served as progenitor for src. We explored the location of these proteins within the cell by using immunoprecipitation to analyze subcellular fractions prepared from avian sarcoma virus-transformed rat and chicken cells and from uninfected rat cells. We found that both pp60src and pp60proto-src were associated with the plasma membrane as active protein kinases and could be recovered efficiently only by disrupting the membranes with nonionic detergent. Our findings, in conjunction with those of other investigators, indicate that both proteins are embedded in the membrane by means of a hydrophobic domain(s); available evidence indicates that pp60src is not exposed on the surface of the cell but is accessible at the cytoplasmic aspect of the plasma membrane. These conclusions lend credence to two current speculations. First, pp60src and pp60proto-src may have similar or even identical functions. Second, neoplastic transformation may originate from derangements in the plasma membrane or its affiliated structures.