The acute retrovirus AKT8, isolated from an AKR mouse T-cell lymphoma, transforms mink lung cells in culture and is oncogenic when inoculated into newborn mice. The oncogene carried by this virus, v-akt, arose by recombination between Gag and the 5'untranslated region of the cellular gene c-akt. v-akt encodes a 105 kilodalton (kd) Gag-Akt fusion protein which is phosphorylated on serine and threonine residues. c-akt encodes a 55 kd serine-threonine protein-kinase, which is related to members of the protein kinase C (PKC) family and contains an SH2-like domain. The SH2-like and catalytic domains of Akt were expressed in E. coli as fusions to the carboxy-terminus of the Maltose binding protein (MBP). Antibodies against these proteins were raised in rabbits and they were used to determine the potential myristylation and subcellular localization of the v-akt and c-akt protein products. Immunoprecipitation of v-akt and c-akt from lysates of [35S] methionine and [3H] myristic acid labeled AKT8 transformed mink lung cells revealed that only v-akt was myristylated. Fractionation of Dounce-homogenized cellular extracts from uninfected and v-akt-transformed mink lung and PA317 cells and from uninfected PC12 cells by differential centrifugation showed that while the c-akt protein was localized primarily in the cytosol (90%), the v-akt protein was dispersed among the cellular compartments with approximately 40% on the plasma membranes, approximately 30% in the nucleus and approximately 30% in the cytosol. To determine whether the differences in post-translational modification and subcellular distribution between c-akt and v-akt translated into oncogenicity differences between the two proteins, we used retrovirus based constructs to express them both in the nontumorigenic rat T cell lymphoma line 5675. Intraperitoneal (IP) inoculation of the parental and c-akt expressing 5675 cells in nude Balb/c mice revealed that neither was oncogenic. In sharp contrast to these results, v-akt expressing 5675 cells inoculated in nude Balb/c mice were found to be highly oncogenic.