Three classes of mammalian phosphoinositide-specific phospholipase C (PLC) have been characterized, PLCbeta, PLCgamma and PLCdelta, that are differentially regulated by heterotrimeric G-proteins, tyrosine kinases and calcium. Here we describe a fourth class, PLCepsilon, that in addition to conserved PLC domains, contains a GTP exchange factor (GRF CDC25) domain and two C-terminal Ras-binding (RA) domains, RA1 and RA2. The RA2 domain binds H-Ras in a GTP-dependent manner, comparable with the Ras-binding domain of Raf-1; however, the RA1 domain binds H-Ras with a low affinity in a GTP-independent manner. While G(alpha)q, Gbetagamma or, surprisingly, H-Ras do not activate recombinant purified protein in vitro, constitutively active Q61L H-Ras stimulates PLC(epsilon) co-expressed in COS-7 cells in parallel with Ras binding. Deletion of either the RA1 or RA2 domain inhibits this activation. Site-directed mutagenesis of the RA2 domain or Ras demonstrates a conserved Ras-effector interaction and a unique profile of activation by Ras effector domain mutants. These studies identify a novel fourth class of mammalian PLC that is directly regulated by Ras and links two critical signaling pathways.