Xmrk encodes a putative transmembrane glycoprotein of the tyrosine kinase family and is a melanoma-inducing gene in Xiphophorus. We attempted to investigate the biological function of the putative Xmrk receptor by characterizing its signalling properties. Since a potential ligand for Xmrk has not yet been identified, it has been difficult to analyse the biochemical properties and biological function of this cell surface protein. In an approach towards such analyses, the Xmrk extracellular domain was replaced by the closely related ligand-binding domain sequences of the human epidermal growth factor receptor (HER) and the ligand-induced activity of the chimeric HER-Xmrk protein was examined. We show that the Xmrk protein is a functional receptor tyrosine kinase, is highly active in malignant melanoma and displays a constitutive autophosphorylation activity possibly due to an activating mutation in its extracellular or transmembrane domain. In the focus formation assay the HER-Xmrk chimera is a potent transforming protein equivalent to other tyrosine kinase oncoproteins.