Differentiation and transformation of untransformed and ts-Src-transformed canine kidney MDCK cells in 2D and 3D environment were investigated using microarray technique, RT-PCR, confocal microscopy and functional assays. Activated Src induced epithelial-mesenchymal transition (EMT) in 2D environment followed by translocation of junctional proteins to the cytoplasm, without significant changes in protein expression. In 3D environment untransformed MDCK cells formed cell cysts with apical domain facing a lumen, E-cadherin delineating the lateral membranes, ZO-1 at tight junctions and caspase-3 in apoptotic cells captured within the lumen. This was accompanied by reduced expression of an apoptosis inhibitor, survivin and vesicle transport effectors, rab 7 and 8, whereas rab 5 expression increased. In 3D environment activated Src induced changes in expression of over 100 genes as revealed by microarray analysis, mostly involved in cell signaling, division and energy metabolism. Only response in cytoskeletal components was decreased expression of actin and Arp2/3 by v-Src, whereas two p120catenin binding proteins Kaiso and Nanos increased their expression. Concomitantly, apoptosis was inhibited by v-Src resulting in formation of a sphere with epitheloid cells facing extracellular matrix and undifferentiated cells captured within the cluster. This was accompanied by increased expression of apoptosis inhibitor survivin, as revealed by western blotting. Mitochondrial membrane potential in untransformed MDCK cells was lower than in ts-Src-MDCK cells in early days of cluster formation correlating with the induction of apoptosis. Hence, v-Src activation in 3D environment did not induce EMT, but brought about inhibition of apoptosis and increased proliferation where increased expression of survivin and inhibition of the mitochondrial permeability have a role.