Vertebrate Src can be activated by specific mutations to become oncogenic. Analogous mutations in Drosophila Src64 (DSrc) induce abnormal differentiation of photoreceptor cells when expressed ectopically in the developing Drosophila adult eye. We have investigated the roles that the adapter protein, Downstream of receptor kinases (Drk), and the SH2 domain-containing tyrosine phosphatase, Corkscrew (Csw), play in this process. We find that dominant-negative mutations in either the drk or csw genes ameliorate the developmental abnormalities induced by activated DSrc. This suggests that Drk and Csw are required downstream of, or parallel to, DSrc. Csw does not act solely as an upstream activator of DSrc. The results are discussed in relation to potential roles for the vertebrate homologues of Drk and Csw (Grb2 and SHP2, respectively) in the transformation of fibroblasts by vertebrate Src.