S3-v-erbB is a retroviral oncogene that encodes a ligand-independent, transforming mutant of the epidermal growth factor receptor. This oncogene has been shown to be sarcomagenic in vivo and to transform fibroblasts in vitro. Our previous studies (McManus, M. J., Lingle, W. L., Salisbury, J. L., and Maihle, N. J. (1997) Proc. Natl. Acad. Sci. U. S. A. 94, 11351-11356) showed that expression of S3-v-erbB in primary fibroblasts results in the tyrosine phosphorylation of caldesmon (CaD), an actin- and calmodulin-binding protein. This phosphorylation is transformation-associated, and the phosphorylated form of CaD is associated with a signaling complex consisting of Shc, Grb2, and Sos in transformed fibroblasts. To identify the tyrosine phosphorylation site(s) in the CaD molecule and to further elucidate the functional role of CaD tyrosine phosphorylation in S3-v-ErbB oncogenic signaling, we have generated a series of mutant CaDs in which one or more tyrosine residues have been replaced with phenylalanine. Using a CaD null cell line, DF1 cells (an immortalized chicken embryo fibroblast cell line), and transient transfection assays, we demonstrated that Tyr-27 and Tyr-393 are the major sites of tyrosine phosphorylation on CaD. Interestingly, Tyr-27 is located within the myosin binding domain of CaD, and Tyr-393 is adjacent to one of the major actin binding and actomyosin ATPase inhibitory domains. Our studies also show that the tyrosine phosphorylation of CaD enhances its binding to the Shc.Grb2 complex. Specifically, replacement of Tyr-27, but not of Tyr-165 or Tyr-393, significantly reduces the ability of CaD to interact with the Shc. Grb2 complex. Together, these studies demonstrate that the major sites of tyrosine phosphorylation on CaD are located in the myosin and actin binding domains of CaD and that Tyr-27 is the major tyrosine phosphorylation site through which CaD interacts with the Shc.Grb2 complex.