Elevated Src protein levels and activity are associated with the development and progression of a variety of cancers. The consequences of deregulated Src activity have been studied extensively in cell culture; however, the effects of this deregulation in vivo, as well as the mechanisms of Src-induced tumorigenesis, remain poorly understood. In this study, the effect of expressing wild-type and constitutively active Drosophila Src-family kinases (SFKs) in the developing eye was examined. Overexpression of either wild-type Drosophila SFK (Src64 and Src42) is sufficient to induce ectopic proliferation in G1/G0-arrested, uncommitted cells in eye imaginal discs. In addition, both kinases trigger apoptosis in vivo, in a dosage-dependent manner. Constitutively active mutants are hypermorphic as they trigger proliferation and death more potently than their wild-type counterparts. Moreover, SFK-induced proliferation and apoptosis are largely independent events, as blocking ectopic proliferation does not block cell death. Further, DCsk (the Drosophila homolog of the C-terminal Src kinase) phosphorylates and interacts genetically with the wild-type SFKs, but not with the constitutively active mutants in which a conserved C-terminal tyrosine was mutated to phenylalanine, providing the first in vivo evidence that Csk regulates SFKs during development through phosphorylation of their C-terminal tyrosine.