We have examined the signal transduction mechanism of the hematopoietic growth factor erythropoietin (Epo). Epo stimulation of Ba/F3 cells transfected with the Epo receptor resulted in increases in tyrosine phosphorylation of proteins of 97, 75, and 55 kDa. Epo-induced increases in tyrosine phosphorylation of a 97-kDa protein were also detected within the Epo receptor complex, suggesting that a protein tyrosine kinase is associated with the Epo receptor. Protein tyrosine kinase activity was found within the Epo receptor complex and modulation of this activity was observed after treatment of cells with Epo. Furthermore, constitutively high amounts of protein kinase activity were observed in Epo receptor complexes isolated from autonomously growing cells coexpressing the Epo receptor and the leukemogenic glycoprotein gp55. The dominant phosphotyrosylprotein found associated with the Epo receptor was 97 kDa. An Epo receptor-associated protein of identical molecular mass was also found to bind ATP, a characteristic critical for protein kinases. Collectively, these data demonstrate that the Epo receptor is associated with protein tyrosine kinase activity and further suggest that a 97-kDa phosphotyrosylprotein associated with the Epo receptor is a protein tyrosine kinase involved in Epo-mediated signal transduction.