A birational transformation f: P^n --> Z, where Z is a nonsingular variety of Picard number 1, is called a special birational transformation of type (a, b) if f is given by a linear system of degree a, its inverse is given by a linear system of degree b and the base locus S \subset P^n of f is irreducible and nonsingular.
In this paper, we classify special birational transformations of type (2,1). In addition to previous works Alzati-Sierra and Russo on this topic, our proof employs natural C^*-actions on Z in a crucial way. These C^*-actions also relate our result to the problem studied in our previous work on smooth projective varieties with nonzero prolongations.