The activation of AP-1 is a hallmark of cell transformation by tyrosine kinases. In this study, we characterize the role of AP-1 proteins in the transformation of chicken embryo fibroblasts (CEF) by v-Src. In normal CEF, the expression of a dominant negative mutant of c-Jun (TAM67) induced senescence. In contrast, three distinct phenotypes were observed when TAM67 was expressed in v-Src-transformed CEF. While senescent cells were also present, the inhibition of AP-1 caused apoptosis in a fraction of the v-Src-transformed cells. In addition, cells containing lipid-rich vesicles accumulated, suggesting that a subpopulation of the v-Src-transformed cells underwent differentiation in response to the inhibition of AP-1. JunD and Fra-2 were the main components of this factor, while c-Jun accounted for a minor fraction of AP-1 in v-Src-transformed CEF. The downregulation of c-Jun expression by short hairpin RNA (shRNA) induced senescence in normal and v-Src-transformed cells. In contrast, a high incidence of apoptosis was caused by the downregulation of JunD, suggesting that it is required for the survival of v-Src-transformed CEF. Levels of the p53 tumor suppressor were elevated under conditions of JunD inhibition. Repression of p53 by shRNA enhanced the survival and anchorage-independent proliferation of v-Src-transformed CEF with JunD/AP-1 inhibition. The inhibition of Fra-2 had no visible phenotype in normal CEF but caused the appearance of lipid-rich vesicles in v-Src-transformed CEF. Therefore, AP-1 facilitated transformation by acting as a survival factor, by inhibiting premature entry into senescence, and by blocking the differentiation of v-Src-transformed CEF.