The discovery that the PTEN tumor suppressor encodes a phosphoinositide 3-phosphatase has raised interest in the effects of constitutive activation of PI 3-kinase. To gain insight into PI 3-kinase function, we have stably expressed a myristoylated form of the catalytic subunit p110 alpha (myr-p110) in cells. The myr-p110 associated with the endogenous p85 regulatory subunit and retained lipid and protein kinase activity. Stable lines expressing myr-p110 had 2- to 4-fold more PI 3-kinase activity than controls. Expression of myr-p110 altered cellular morphology and increased the saturation density in culture. These clones were morphologically transformed but Akt and pp70(s6k) were not constitutively activated in contrast to transient assays and from tumor cell lines deficient in PTEN. In addition, the ability of PDGF to induce activation of Akt and pp70(s6k) was diminished. Therefore, expression of a myristoylated PI 3-kinase in murine fibroblasts induces a morphological transformation of the cells.