Fps/Fes proteins were among the first members of the protein tyrosine kinase family to be characterized as dominant-acting oncoproteins. Addition of retroviral GAG sequences or other experimentally induced mutations activated the latent transforming potential of Fps/Fes. However, activating mutations in fps/fes had not been found in human tumors until recently, when mutational analysis of a panel of colorectal cancers identified four somatic mutations in sequences encoding the Fps/Fes kinase domain. Here, we report biochemical and theoretical structural analysis demonstrating that three of these mutations result in inactivation, not activation, of Fps/Fes, whereas the fourth mutation compromised in vivo activity. These results did not concur with a classic dominant-acting oncogenic role for fps/fes involving activating somatic mutations but instead raised the possibility that inactivating fps/fes mutations might promote tumor progression in vivo. Consistent with this, we observed that tumor onset in a mouse model of breast epithelial cancer occurred earlier in mice targeted with either null or kinase-inactivating fps/fes mutations. Furthermore, a fps/fes transgene restored normal tumor onset kinetics in targeted fps/fes null mice. These data suggest a novel and unexpected tumor suppressor role for Fps/Fes in epithelial cells.