Upon cell adhesion to extracellular matrix proteins, focal adhesion kinase (FAK) rapidly undergoes autophosphorylation on its Tyr-397 which consequently serves as a binding site for the Src homology 2 domains of the Src family protein kinases and several other intracellular signaling molecules. In this study, we have attempted to examine the effect of the FAK Y397F mutant on v-Src-stimulated cell transformation by establishing an inducible expression of the Y397F mutant in v-Src-transformed FAK-null (FAK(-/-)) mouse embryo fibroblasts. We found that the FAK Y397F mutant had both positive and negative effects on v-Src-stimulated cell transformation; it promoted v-Src-stimulated invasion, but on the other hand it inhibited the v-Src-stimulated anchorage-independent cell growth in vitro and tumor formation in vivo . The positive effect of the Y397F mutant on v-Src-stimulated invasion was correlated with an increased expression of matrix metalloproteinase-2, both of which were inhibited by the specific phosphatidylinositol 3-kinase inhibitor wortmannin or a dominant negative mutant of AKT, suggesting a critical role for the phosphatidylinositol 3-kinase/AKT pathway in both events. However, the expression of the Y397F mutant rendered v-Src-transformed FAK(-/-) cells susceptible to anoikis, correlated with suppression on v-Src-stimulated activation of ERK and AKT. In addition, under anoikis stress, the induction of the Y397F mutant in v-Src-transformed FAK(-/-) cells selectively led to a decrease in the level of p130(Cas), but not other focal adhesion proteins such as talin, vinculin, and paxillin. These results suggest that FAK may increase the susceptibility of v-Src-transformed cells to anoikis by modulating the level of p130(Cas).