The effect of polyoma middle-sized tumor antigen (MTAg) on phosphatidylinositol metabolism has been characterized in vivo and in vitro using polyoma-transformed and polyoma-infected cells. Cells infected with transformationcompetent polyoma virus exhibit increased levels of inositol phospholipids and the second messenger inositol trisphosphate. MTAg or pp6Ocsrc Immunoprecipitates from MTAg-transformed cells contain an activity that phosphorylates phosphatidylinositol and phosphatidylinositol 4-phosphate. This activity is induced in parallel with MTAg when the MTAg synthesis is regulated by hormonal or heavy metal inducers. Immunoprecipitates from one class of polyoma mutants defective in transformation have a reduced level of associated phosphatidylinositol kinase activity in vitro yet are capable of tyrosine phosphorylation on exogenous protein substrates at rates comparable to wild-type virus. Thus, for these mutants, phosphatidylinositol kinase activity is more tightly correlated with transformation than is protein kinase activity. These results suggest that alterations in phosphatidylinositol metabolism by MTAg play a role in transformation by polyoma virus.A possible mechanism for generating some of the phenotypic changes associated with transformation may involve altered phosphorylation and turnover of the membrane phospholipid phosphatidylinositol (PtdIns). Experiments with pp60v-src and pp68v-rs, the transforming gene products of the Rous sarcoma virus and UR2 viruses, respectively, suggest that PtdIns phosphorylation is regulated by viral oncogene products. These studies have identified PtdIns kinase activities associated with pp6Ovsrc and pp6ov-ros proteins and increased PtdIns turnover in vivo in cells transformed with these oncogenes (1, 2). Increased turnover of PtdIns and its phosphorylated derivatives, phosphatidylinositol 4-phosphate (PtdInsP) and phosphatidylinositol 4,5-bis(phosphate) (PtdInsP2), has been implicated in cellular responses to a wide variety of stimuli, including response to some growth factors (3, 4). PtdInsP2 breakdown generates two second messengers, diacylglycerol and inositol tris(phosphate) (InsP3). Diacylglycerol activates the calcium-and phospholipid-dependent protein kinase, which is the major cellular receptor for tumor promoting phorbol esters (5). InsP3 mobilizes calcium from internal stores (6).The roles oftyrosine and PtdIns phosphorylation in cellular growth regulation are relevant to the mechanism of transformation by the DNA tumor virus polyoma. Central to polyoma viral-mediated transformation is the activity of one of the polyoma virus early gene products, the middle-sized tumor antigen (MTAg) (7,8). Mutations that alter MTAg but do not affect the other viral proteins can either abolish or drastically diminish the ability of the virus to transform (7, 9). In established lines, MTAg alone is sufficient to cause transformation (10). MTAg is a membrane-bound protein anchored by a stretch of hydrophobic amino acids at its carboxyl terminus (11,12). A subpopul...