SWAP-70, a phosphatidylinositol trisphosphate (PtdIns(3,4,5)P-3) binding protein, has been suggested to be involved in transformation of mouse embryo fibroblasts (MEFs) as well as membrane ruffling after growth factor stimulation of the cells. A mutant, SWAP-70-374, was found to be able to bind to F-actin in vitro, whereas wild-type SWAP-70 failed to do so. This mutant was present at the plasma membrane without any stimulation while the wild-type protein was present only in the cytosol unless cells were stimulated with EGF. Expression of this mutant in MEFs resulted in morphologic transformation, fast growth, and loss of contact inhibition, suggesting that SWAP-70 with this mutation can transform the cells. ERK1/2 was activated in SWAP-70-374-transformed cells. Use of MEK inhibitors revealed that the ERK1/2 pathway does not affect the cell growth of MEFs but is responsible for loss of contact inhibition. To investigate the function of SWAP-70 further, drugs that can inhibit SWAP-70-dependent cell responses were screened. Among various drugs, sanguinarine was found to inhibit transformation of MEFs by SWAP-70-374. This drug was able to inhibit SWAP-70-mediated membrane ruffling as well, suggesting that its effect was closely related to the SWAP-70 signaling pathway. These results suggest that SWAP-70-374 can activate some signaling pathways, including the ERK1/2 pathway, to transform MEFs.