Replacing a substring with another

I'm creating this program that is going to:
1. Read a file
2. Find occurances of a substring within the string read in
3. Replace the occurances of this substring with another string
4. Write to new file

Code:

#include <stdio.h>
#include <string.h>
#include <stdlib.h>

#define MAX 512
#define _GNU_SOURCE

int main(int argc, char *argv[])
{
  FILE *file, *file2;
  char line[MAX], *subLocation;

  if (argc != 4)
  {
    printf("You must enter: ./replace old-string new-string file-name\n");
    exit(1);
  }

  file = fopen(argv[3], "r");
  file2 = fopen("temp", "w");

  while (fgets(line,sizeof(line),file) != NULL)
  {
    /* Search for string 1 in string buffer */
    if (subLocation == NULL)
    {
      subLocation = strstr(line, argv[1]);
     /* position = subLocation-line */

    /* Write the line */
    fputs(line, file2);
    printf(line); /*Show me the line */

  }
  /* Close everything */
  fclose (file);
  fclose (file2);
  return 0;
}

I have 1 and 4 down lol. Now I'm pretty new to C...though I have done C++. It's fairly different and I was hoping you guys can shed some light onto some functions I can use for finding and replacing the substring.
I've so far got strstr which will find the first occurance of the string (and i can loop to see if there is more than one). But I'm not sure what I should use to replace it. Any help would be greatly appreciated .

Thanks,
Dan

> subLocation = strstr(line, argv[1]);
Given a string of "LEFTMIDDLERIGHT", and you searched for MIDDLE

then
subLocation-line gives you 4 (the length of LEFT)
subLocation+strlen(argv[1]) gives you a pointer to RIGHT

- write out the left
- write out the replacement
- advance to the RIGHT
- repeat until there's no more string

Thanks for clearing it up
Dan

Code:

printf(line); /*Show me the line */

You shouldn't do this, in case the line contains a %. Use

Code:

printf("%s", line);

or better yet

Code:

puts(line);

which is the same as

Code:

printf("%s\n", line);