The role of the proto-oncogene c-src in mouse development has been investigated by studying the consequences of expressing its viral homologue, v-src. Embryonic stem (ES) cell lines with differing levels of v-src tyrosine kinase activity have been used to generate chimaeric mice. Whereas a low level of v-src expression is compatible with embryogenesis, chimaeras derived from ES clones with high levels of v-src activity develop abnormally and die on the 8th-9th day of gestation. These abnormalities are characterized by the formation of twin or multiple embryos within the same Reichert's membrane, and by the arrest of embryonic development at the late egg cylinder stage, accompanied by relative expansion of the visceral yolk sac (VYS) and hyperplasia of the VYS endoderm. These results demonstrate for the first time that deregulated expression of the src protooncogene product can induce developmental abnormalities during early embryogenesis.