A Met-hepatocyte growth factor receptor oncoprotein, Tpr-Met, generated by chromosomal rearrangement, fuses a protein dimerization motif with the cytoplasmic domain of the Met receptor, producing a cytosolic, constitutively activated tyrosine kinase. Although both the Met receptor and the Tpr-Met oncoprotein associate with the same substrates, activating mutations of the Met receptor in hereditary papillary renal carcinomas have different signaling requirements for transformation than Tpr-Met. This suggests differential activation of membrane-localized pathways by oncogenic forms of the membrane-bound Met receptor but not by the cytoplasmic Tpr-Met oncoprotein. To establish which pathways might be differentially regulated, we have localized the constitutively activated Tpr-Met oncoprotein to the membrane using the c-src myristoylation signal. Membrane localization enhances cellular transformation, focus formation, and anchorage-independent growth and induces tumors with a distinct myxoid phenotype. This correlates with the induction of hyaluronic acid (HA) and the presence of a distinct form of its receptor, CD44. A pharmacological inhibitor of phosphoinositide 3′ kinase (PI3′K), inhibits the production of HA, and conversely, an activated, plasma membrane-targeted form of PI3′K is sufficient to enhance HA production. Furthermore, the multisubstrate adapter protein Gab-1, which couples the Met receptor with PI3′K, enhances Met receptor-dependent HA synthesis in a PI3′K-dependent manner. These results provide a positive link to a role for HA and CD44 in Met receptor-mediated oncogenesis and implicate PI3′K in these events.