When NIH 3T3-derived c-src overexpresser cells synchronized in early S phase were exposed to caffeine, mitosis specific events such as the induction of round cell morphology and the activation of c-src protein tyrosine kinase were induced, and then disappeared upon further incubation. These mitosis specific events occurred even in the presence of cycloheximide or actinomycin D. Within 1 h of exposure to caffeine, c-src protein tyrosine kinase activity rose 2-3 fold compared with untreated controls, but returned to the control level upon further incubation. In contrast, when cells were treated by sod. vanadate, a protein tyrosine phosphatase inhibitor with caffeine simultaneously, no increase in c-src kinase activity was observed. These results suggest that caffeine sensitive tyrosine 527 phosphatase or kinase controls the activation of $pp60^{c-src}$ kinase.