The P130gag-fps transforming protein of Fujinami sarcoma virus (FSV) possesses tyrosine-specific protein kinase activity and autophosphorylates at Tyr-1073. Within the kinase domain of P130gag-fps is a putative ATP-binding site containing a lysine (Lys-950) homologous to lysine residues in cAMP-dependent protein kinase and p60v-src which bind the ATP analogue p-fluorosulfonylbenzoyl-5' adenosine. FSV mutants in which the codon for Lys-950 has been changed to codons for arginine or glycine encode metabolically stable but enzymatically defective proteins which are unable to effect neoplastic transformation. Kinase-defective P130gag-fps containing arginine at residue 950 was normally phosphorylated at serine residues in vivo suggesting that this amino acid substitution has a minimal effect on protein folding and processing. The inability of arginine to substitute for lysine at residue 950 suggests that the side chain of Lys-950 is essential for P130gag-fps catalytic activity, probably by virtue of a specific interaction with ATP at the phosphotransfer active site. Tyr-1073 of the Arg-950 P130gag-fps mutant protein was not significantly autophosphorylated either in vitro or in vivo, but could be phosphorylated in trans by enzymatically active P140gag-fps. These data indicate that Tyr-1073 can be modified by intermolecular autophosphorylation.