We have investigated the expression of Jun family proteins and composition of AP-1 in chicken embryo fibroblasts before and after transformation by the v-Jun oncoprotein of ASV17. We show that p39 c-Jun is the predominant Jun family protein expressed in normal fibroblasts, and that heterodimers of c-Jun and Fos-related partners (Fra's) account for the majority of the AP-1 DNA binding activity. Unexpectedly, because ASV17-transformed fibroblasts do not express p39 c-Jun, v-Jun replaces c-Jun as the predominant AP-1 constituent in association with similar or identical Fra's. This substitution has little effect on the overall level of TRE-specific DNA binding activity, however it results in a profound reduction in TRE-dependent transcriptional activity and a striking defect in signal-regulated phosphorylation of the Jun component of AP-1; whilst agonists of SAPK/JNK kinases trigger transient N-terminal phosphorylation of c-Jun in normal fibroblasts, no corresponding modification of v-Jun occurs in ASV17-transformed cells. Because SAPK/JNK-mediated phosphorylation is thought to regulate c-Jun transcriptional activity and thereby cellular gene expression in response to extracellular signals, we propose that subversion of this signal transduction process by v-Jun is likely to contribute to oncogenesis by ASV17.