The interferon induced double-stranded RNA-activated kinase, PKR, has been suggested to act as a tumor suppressor since expression of a dominant negative mutant of PKR causes malignant transformation. However, the mechanism of transformation has not been elucidated. PKR phosphorylates translation initiation factor eIF-2 alpha on Ser51, resulting in inhibition of protein synthesis and cell growth arrest. Consequently, it is possible that cell transformation by dominant negative PKR mutants is caused by inhibition of eIF-2 alpha phosphorylation. Here, we demonstrate that in NIH 3T3 cells transformed by the dominant negative PKR mutant (PKR delta 6), eIF-2 alpha phosphorylation is dramatically reduced. Furthermore, expression of a mutant form of eIF-2 alpha, which cannot be phosphorylated on Ser51 also caused malignant transformation of NIH 3T3 cells. These results are consistent with a critical role of phosphorylation of eIF-2 alpha in control of cell proliferation, and indicate that dominant negative PKR mutants transform cells by inhibition of eIF-2 alpha phosphorylation.