Phospholipase C-gamma1 (PLC-gamma1) plays pivotal roles in cellular growth and proliferation through its two Src homology (SH) 2 domains and its single SH3 domain, which interact with signaling molecules in response to various growth factors and hormones. However, the role of the SH domains in the growth factor-induced regulation of PLC-gamma1 is unclear. By peptide-mass fingerprinting analysis we have identified Cbl as a binding protein for the SH3 domain of PLC-gamma1 from rat pheochromatocyte PC12 cells. Association of Cbl with PLC-gamma1 was induced by epidermal growth factor (EGF) but not by nerve growth factor (NGF). Upon EGF stimulation, both Cbl and PLC-gamma1 were recruited to the activated EGF receptor through their SH2 domains. Mutation of the SH2 domains of either Cbl or PLC-gamma1 abrogated the EGF-induced interaction of PLC-gamma1 with Cbl, indicating that SH2-mediated translocation is essential for the association of PLC-gamma1 and Cbl. Overexpression of Cbl attenuated EGF-induced tyrosine phosphorylation and the subsequent activation of PLC-gamma1 by interfering competitively with the interaction between PLC-gamma1 and EGFR. Taken together, these results provide the first indications that Cbl may be a negative regulator of intracellular signaling following EGF-induced PLC-gamma1 activation.