The p12I protein, a small hydrophobic protein encoded by the human T cell leukaemia/lymphotropic virus type I pX region, contains a proline-rich region located between two putative transmembrane (TM) domains. The p12I protein is associated with cellular endomembranes, and physically binds to the 16 kDa subunit of the vacuolar H+-ATPase proton pump. To investigate the nature of the 16 kDa and p12I interaction and to determine the oncogenic domain of p12I, we constructed p12I mutant proteins in which various portions of the TM domains were deleted, as well as p12I mutant containing a single amino acid substitution. These mutants were tested for binding to the 16 kDa subunit of the vacuolar H+-ATPase in HeLa/Tat cells and for the capability to potentiate transformation by bovine papillomavirus type 1 E5 oncoprotein in mouse C127 cells. The results indicated that both TM domains of the p12I protein were dispensable for its interaction with the 16 kDa protein, whereas partial or complete deletion of the proline-rich region resulted in decreased or no binding of the p12I protein to the 16 kDa subunit. Immunofluorescence analysis of HeLa/Tat cells transfected with the p12I mutants showed that deletion of the proline-rich region did not alter the subcellular localization of these mutant p12I proteins, suggesting direct involvement of the proline-rich domain in binding rather than the failure of these p12I mutants to reach the appropriate cellular compartment. Mapping of 16 kDa subunit mutants in binding with p12I protein suggested that molecular determinants located between the second and third TM domain of the 16 kDa protein might be involved in this interaction. Finally, most of the p12I mutants lost the ability to potentiate transformation of C127 cells indicating that binding of p12I to the 16 kDa subunit does not directly correlate with oncogenicity.