Undifferentiated crypt cells from chicken small intestine contain 15-fold higher levels of tyrosine-phosphorylated proteins than do differentiated enterocytes located at the villus apex. The tyrosine kinase activity and the tyrosine-phosphorylated proteins are associated with the Triton-insoluble cytoskeleton. To determine whether: (1) pp60c-src is an active tyrosine kinase in crypt cell cytoskeletons and (2) cytoskeletal-associated pp60c-src activity decreases as crypt cells differentiate, we isolated pp60c-src from subcellular fractions of cells along the crypt-villus axis of chicken small intestine and measured its protein kinase activity. We observed that pp60c-src activity in crypt cytoskeleton was higher (on average, fourfold as measured by enolase phosphorylation or sevenfold as measured by autophosphorylation) than that in cytoskeletons from differentiated enterocytes. Moreover, nearly 70% of pp60c-src activity in crypt cells, like that of pp60v-src, pp60c-src mutants with elevated kinase, activity or pp60v-src from activated platelets, localized to the cellular cytoskeleton. In contrast, less than 20% of pp60c-src activity in differentiated enterocytes, like that of kinase-inactive pp60v-src or pp60c-src from fibroblasts or resting platelets, associated with the cytoskeleton. Furthermore, in crypt cells, unlike differentiated enterocytes, cytoskeletal-associated pp60c-src appeared to have higher specific protein tyrosine kinase activity than did soluble pp60c-src. The data suggest that a kinase-active form of pp60c-src located in the cytoskeleton of crypt cells may be responsible for phosphorylating proteins on tyrosine and regulating growth and differentiation of the cells.