The CEF-4/9E3 chemokine gene is expressed constitutively in chicken embryo fibroblasts (CEF) transformed by the Rous sarcoma virus (RSV). This aberrant induction is controlled at the transcriptional and post-transcriptional levels. Transcriptional activation depends on multiple elements of the CEF-4 promoter composing a Src-responsive-Unit or SRU. The SRU includes a TPA responsive element, a PRDII/kappaB domain and a CAAT box. In this report, we identify C/EBPbeta as a component of the trans-acting factor interacting with the CAAT box of the CEF-4 promoter. In addition, we show that C/EBPbeta binds to a second element located in proximity of the TRE. A mutation of this distal CAAT box impaired the activation of the CEF-4 promoter by pp60(v-src) indicating that this element is also part of the SRU. Using the RCASBP retroviral vector, we expressed a dominant negative mutant of C/EBPbeta (designated Delta184-C/EBPbeta) in RSV-transformed CEF. Delta184-C/EBPbeta decreased the accumulation of the CEF-4 mRNA and activation of the CEF-4 promoter by pp60(v-src). The induction of the Cox-2 gene (CEF-147) was also reduced by Delta184-C/EBPbeta. The effect of the dominant negative mutant was observed within 1 h of the activation of a thermolabile pp60(v-src) suggesting that C/EBPbeta is an early target of v-src transformation. The dominant negative mutant did not inhibit the transformation of CEF by RSV and in fact accentuated the transformed cell phenotype. Therefore, the activation of C/EBPbeta is important for the expression of v-src regulated genes but is not required for the in vitro transformation of CEF by pp60(v-src).