The role of the insulin receptor substrate 1 (IRS-1) in cellular transformation was studied in R- cells, which are 3T3-like fibroblasts derived from mouse embryos with a targeted disruption of the insulin-like growth factor I receptor gene. These cells cannot be transformed by oncogenes that readily transform cells originating from wild-type littermate embryos (or other 3T3-like cells). In the present study, we demonstrate that in R- cells, the overexpression of the functional IRS-1 protein was sufficient to induce a mitogenic response to insulin but did not promote transformation, as measured by colony formation in soft agar. The coexpression of IRS-1 and the SV40 T antigen, however, induced transformation. Conversely, expression of an antisense IRS-1 RNA reversed the transformed phenotype in wild-type cells carrying the T antigen. Since the type 1 insulin-like growth factor receptor, by itself, is fully transforming, we propose the hypothesis that the transforming competence of this receptor is based on at least two signaling pathways, one of which is IRS-1-dependent, whereas the other(s) can be substituted with the SV40 T antigen.