The P130gag-fps protein-tyrosine kinase of Fujinami sarcoma virus contains an N-terminal fps-specific domain (Nfps) that is important for oncogenicity. The N-terminal 14 amino acids of p60v-src, which direct myristylation and membrane association, can replace the gag-Nfps sequences of P130gag-fps (residues 1 to 635), producing a highly transforming src-fps polypeptide. Conversely, gag-Nfps can restore modest transforming activity to a nonmyristylated v-src polypeptide. These results emphasize the modular construction of protein-tyrosine kinases and indicate that Nfps, possibly in conjunction with gag, functions in the subcellular localization of P130gag-fps.