AG 879 has been widely used as a Tyr kinase inhibitor specific for ErbB2 and FIK-1, a VEGF receptor. The IC50 for both ErbB2 and FIK-1 is around 1 μM. AG 879, in combination of PP1 (an inhibitor specific for Src kinase family), suppresses almost completely the growth of RAS-induced sarcomas in nude mice. In this paper we demonstrate that AG 879 even at 10 nM blocks the specific interaction between the Tyr-kinase ETK and PAK1 (a CDC42/ Rac-dependent Ser/ Thr kinase) in cell culture. This interaction is essential for both the RAS-induced PAK1 activation and transformation of NIH 3T3 fibroblasts. However, AG 879 at 10 nM does not inhibit either the purified ETK or PAK1 directly in vitro, suggesting that this drug blocks the ETK-PAK1 pathway by targeting a highly sensitive kinase upstream of ETK Although the Tyr-kinases Src and FAK are known to activate ETK directly, Src is insensitive to AG 879, and FAK is inhibited by 100 nM AG 879, but notby 10 nM AG879. The structure-function relationship analysis of AG 879 derivatives has revealed that both thio and tert-butyl groups of AG 879, but not (thio) amide group, are essential for its biological function (blocking the ETK-PAK1 pathway), suggesting that through the (thio) amide group, AG 879 can be covalently linked to agarose beads to form a bioactive affinity ligand useful for identifying the primary target of this drug.