Aggressive human brain tumours (gliomas) often express a truncated and oncogenic form of the epidermal growth factor receptor, known as EGFRvIII. Within each tumour only a small percentage of glioma cells may actually express EGFRvIII; however, most of the cells exhibit a transformed phenotype. Here we show that EGFRvIII can be 'shared' between glioma cells by intercellular transfer of membrane-derived microvesicles ('oncosomes'). EGFRvIII expression in indolent glioma cells stimulates formation of lipid-raft related microvesicles containing EGFRvIII. Microvesicles containing this receptor are then released to cellular surroundings and blood of tumour-bearing mice, and can merge with the plasma membranes of cancer cells lacking EGFRvIII. This event leads to the transfer of oncogenic activity, including activation of transforming signalling pathways (MAPK and Akt), changes in expression of EGFRvIII-regulated genes (VEGF, Bcl-x_L, p27), morphological transformation and increase in anchorage-independent growth capacity. Thus, membrane microvesicles of cancer cells can contribute to a horizontal propagation of oncogenes and their associated transforming phenotype among subsets of cancer cells.