CD98hc (SLC3A2) constitutively and specifically associates with beta(1) integrins and is highly expressed on the surface of human tumor cells irrespective of the tissue of origin. We have found here that expression of CD98hc promotes both anchorage- and serum-independent growth. This oncogenic activity is dependent on beta(1) integrin-mediated phosphoinositol 3-hydroxykinase stimulation and the level of surface expression of CD98hc. Using chimeras of CD98hc and the type II membrane protein CD69, we show that the transmembrane domain of CD98hc is necessary and sufficient for integrin association in cells. Furthermore, CD98hc/beta(1) integrin association is required for focal adhesion kinase-dependent phosphoinositol 3-hydroxykinase activation and cellular transformation. Amino acids 82-87 in the putative cytoplasmic/transmembrane region appear to be critical for the oncogenic potential of CD98hc and provide a novel mechanism for tumor promotion by integrins. These results explain how high expression of CD98hc in human cancers contributes to transformation; furthermore, the transmembrane association of CD98hc and beta(1) integrins may provide a new target for cancer therapy.