Intracellular proteases play key roles in cell differentiation, proliferation and apoptosis. In nerve cells, little is known about their relative contribution to the pathways which control cell physiology, including cell death. Neoplastic transformation of avian neuroretina cells by p60(v-src) tyrosine kinase results in dramatic morphological changes and deregulation of apoptosis. To identify the proteases involved in the cellular response to p60(v-src), we evaluated the effect of specific inhibitors of caspases, calpains and the proteasome on cell shape changes and apoptosis induced by p60(v-src) inactivation in quail neuroretina cells transformed by tsNY68, a thermosensitive strain of Rous sarcoma virus. We found that the ubiquitin-proteasome pathway is recruited early after p60(v-src) inactivation and is critical for morphological changes, whereas caspases are essential for cell death. This study provides evidence that distinct intracellular proteases are involved in the control of the morphology and fate of v-src-transformed cells.