Previously, we isolated a novel gene, drs, which was downregulated by retroviral oncogenes such as v-src and v-K-ras, from a cDNA library of primary rat embryo fibroblasts. Experiments using a temperature-sensitive mutant of the v-src gene indicated that downregulation of drsmRNA was dependent on functional expression of v-Src. In addition, expression of drs mRNA was also reduced by serum stimulation of G0-arrested normal rat fibroblast cells. To clarify the function of the drs gene in cell transformation and proliferation, we introduced drs linked to a potent promoter into a normal rat cell line, F2408, and examined the effect of ectopic expression of exogenous drs on the transformation by the v-src gene and growth properties. Cells expressing exogenous drs gene showed significantly decreased efficiency of transformation by v-src irrespective of functional expression of v-Src kinase, while the growth rate and G1/S progression of the cells were not suppressed by expression of exogenous drs gene, indicating thatdrs has the ability to suppress v-srctransformation without disturbing cell proliferation.