We previously demonstrated that sialidase NEU3, a key glycosidase for ganglioside degradation, is up-regulated in various human cancers, leading to increased cell invasion, motility and survival of cancer cells possibly through activation of EGF signaling. Its up-regulation is also important for promotion of the stage of colorectal carcinogenesis in vivo in human NEU3 transgenic mice treated with azoxymethane for the induction of aberrant crypt foci in the colon mucosa, accompanied by enhanced phosphorylation of EGF receptor (EGFR). To address whether the activation of EGF signaling by the sialidase is associated with oncogenic transformation, we here analyzed the effects of overexpression of NEU3 and EGFR in NIH-3T3 cells. When NEU3 was stably transfected with or without EGFR, it was associated with significant increases in clonogenic growth, clonogenicity on soft agar and in vivo tumor growth in nude mice either with or without the receptor overexpression in the presence of EGF, compared with the levels in their vector controls. Despite the fact that the endogenous level of EGFR is known to be extremely low in these cells, NEU3 significantly enhanced the phosphorylation of Akt and ERK, as well as that of the receptor. The NEU3-mediated activation was largely abrogated by the EGFR inhibitor AG1478 or PD153035, but significant clonogenic growth still remained. NEU3 was then found to activate Src kinase, and the clonogenicity was completely suppressed by an Src inhibitor, PP2. The activity-null mutants failed to activate Src and EGFR, indicating that ganglioside modulation by NEU3 may be necessary for the activation. NEU3 and Src were co-immunoprecipitated with EGFR in NEU3- and EGFR- transfected cells. These findings identify NEU3 as an essential participant in tumorigenesis through the EGFR/Src signaling pathway and a potential target for inhibiting EGFR-mediated tumor progression.