Hck is a member of the Src protein-tyrosine kinase family and is expressed strongly in macrophages, an important HIV target cell. Previous studies have shown that Nef, an HIV-1 accessory protein essential for AIDS progression, binds and activates Hck through its SH3 domain. Structural analysis suggests that Nef forms oligomers in vivo, which may bring multiple Hck molecules into close proximity and promote autophosphorylation. Using bimolecular GFP fluorescence complementation, we show for the first time that Nef oligomerizes in living cells and that the oligomers localize to the plasma membrane. To test the role of Nef oligomerization in Hck activation, we fused Nef to the hormone-binding domain of the estrogen receptor (Nef-ER), allowing us to control its dimerization with 4-hydroxytamoxifen (4-HT). In Rat-2 fibroblasts co-expressing Nef-ER and Hck, 4-HT treatment induced Nef-ER dimer and tetramer formation, leading to Hck kinase activation and cellular transformation. The number of transformed foci observed with Nef-ER plus Hck in the presence of 4-HT was markedly greater than that observed with wild-type Nef plus Hck, suggesting that enforced oligomerization enhances activation of Hck by Nef in vivo. Enhanced transformation correlated with increased Hck/Nef complex formation at the plasma membrane. In complementary experiments, we observed that a Nef mutant defective for Hck SH3 domain binding (Nef-PA) suppressed Hck kinase activation and transformation by the wild-type Hck/Nef complex. This effect correlated with the formation of a ternary complex between wild-type Nef, Nef-PA, and Hck, suggesting that Nef-PA suppresses Hck activation by blocking wild-type Nef oligomerization. Finally, Nef-ER induced Hck activation in a 4-HT-dependent manner in the macrophage precursor cell line TF-1, suggesting that oligomerization is essential for signaling through Hck in a cell background relevant to HIV infection. Together, these data demonstrate that Nef oligomerization is critical to the activation of Hck in vivo, and suggest that inhibitors of oligomerization may suppress Nef signaling through Hck in HIV-infected macrophages, slowing disease progression.