The nonreceptor tyrosine kinase, c-src, and the steroid hormone, 1,25-dihydroxyvitamin D 3 (1,25(OH) 2 D 3 ), are essential to development of the osteoclast phenotype. On the other hand, functional relationships between the activities of c-src and 1,25(OH) 2 D 3 are as yet unknown. To determine if 1,25(OH) 2 D 3 modulates c-src in osteoclastogenesis, we tested the steroid's effect on avian marrow-derived osteoclast precursors. We find c-src mRNA and immunoprecipitable c-src protein (pp60 c-src ) unaltered by 72 h exposure of these cells to 1,25(OH) 2 D 3 (10 Ϫ11 to 10 Ϫ9 M). Despite no quantitative change in pp60 c-src , in vitro kinase assay of the immune complex reveals 1,25(OH) 2 D 3 dose-dependently accelerates the catalytic activity of pp60 c-src , enhancing its autophosphorylation and phosphorylation of exogenous substrate. This observation represents the first documentation, in nontransformed cells, of humoral induction of pp60 c-src kinase. Consistent with the fact pp60 c-src is activated by dephosphorylation of tyrosine 527 (Y527), the phosphotyrosine content of the pp60 c-src immunoprecipitate, measured by immunoblot, is decreased by 1,25(OH) 2 D 3 . Alternatively, mRNA and protein levels of c-src kinase (CSK), which inactivates pp60 c-src by phosphorylating Y527, are not altered by the steroid. In contrast, 1,25(OH) 2 D 3 enhances mRNA and especially protein levels of avian protein tyrosine phosphatase (PTP), an enzyme specifically activating pp60 c-src by dephosphorylating Y527 [Fang et al. (1994): J Biol Chem 269:20194-20200]. Thus, treatment of avian osteoclast precursors with 1,25(OH) 2 D 3 accelerates the catalytic activity of pp60 c-src independent of protein expression. Activation of the kinase may occur via the Y527 dephosphorylating enzyme PTP, expression of which, we show for the first time, is regulated.