Infection of bovine T cells and B cells with the intracellular protozoan parasite Theileria parva induces a transformed phenotype with characteristics comparable to leukemic cells. The transformed phenotype reverts on drug-induced parasite death, and the cured lymphocytes acquire a resting phenotype and eventually die by apoptosis if not further stimulated. Here, we show that both lymphocyte proliferation and activation of the transcription factor AP-1 are mediated by Src-family protein tyrosine kinases (PTKs) in a parasite-dependent fashion. Src-family PTKs are known to be present in glycolipid-enriched microdomains (GEMs), also called lipid rafts, and to be negatively regulated by PTK Csk complexed to tyrosine-phosphorylated transmembrane adapter protein PAG (phosphoprotein associated with GEMs) also called Cbp (Csk-binding protein). We, therefore, purified GEMs from proliferating infected B cells and from growth-arrested cells that had been drug-cured of parasites. Proliferation arrest led to a striking increase of PAG/Cbp expression; correspondingly, the amount of Csk associated with PAG/Cbp in GEMs increased markedly, whereas PTK Hck accumulation in GEM fractions did not alter on growth arrest. We propose that Theileria-induced lymphocyte proliferation and permanent activation of Hck stems from down-regulation of PAG/Cbp and the concomitant constitutive loss of the negative regulator Csk from the GEMs of transformed B cells.