The Src substrate p130(Cas) is a docking protein containing an SH3 domain, a substrate domain that contains multiple consensus SH2 binding sites, and a Src binding region. We have examined the possibility that Cas plays a role in the transcriptional activation of immediate early genes (IEGs) by v-Src. Transcriptional activation of IEGs by v-Src occurs through distinct transcriptional control elements such as the serum response element (SRE). An SRE transcriptional reporter was used to study the ability of Cas to mediate Src-induced SRE activation. Coexpression of v-Src and Cas led to a threefold increase in SRE-dependent transcription over the level induced by v-Src alone. Cas-dependent activation of the SRE was dependent on the kinase activity of v-Src and the Src binding region of Cas. Signaling to the SRE is promoted by a serine-rich region within Cas and inhibited by the Cas SH3 domain. Cas-dependent SRE activation was accompanied by an increase in the level of active Ras and in the activity of the mitogen-activated protein kinase (MAPK) Erk2; these changes were blocked by coexpression of dominant-negative mutants of the adapter protein Grb2. SRE activation was abrogated by coexpression of dominant-negative mutants of Ras, MAPK kinase (Mek1), and Grb2. Coexpression of Cas with v-Src enhanced the association of Grb2 with the adapter protein Shc and the protein tyrosine phosphatase Shp-2; coexpression of Shc or Shp-2 mutants significantly reduced SRE activation by Cas and v-Src. Cas-induced Grb2 association with Shp-2 and Shc may account for the Cas-dependent activation of the Ras/Mek/Erk pathway and SRE-dependent transcription. 14-3-3 proteins may also play a role in Cas-mediated signaling to the SRE. Overexpression of Cas was found to modestly enhance epidermal growth factor (EGF)-induced activation of the SRE. A Cas mutant lacking the Src binding region did not potentiate the EGF response, suggesting that Cas enhances EGF signaling by binding to endogenous cellular Src or another Src family member. These observations implicate Cas as a mediator of Src-induced transcriptional activation.