Bruton's tyrosine kinase (Btk) is essential for normal B lymphocyte development and function. The activity of Btk is partially regulated by transphosphorylation within its kinase domain by Src family kinases at residue Tyr-551 and subsequent autophosphorylation at Tyr-223. Activation correlates with Btk association with cellular membranes. Based on specific loss of function mutations, the Btk pleckstrin homology (PH) domain plays an essential role in this activation process. The Btk PH domain can bind in vitro to several lipid end products of the phosphatidylinositol 3-kinase (PI 3-kinase) family including phosphatidylinositol 3,4,5-trisphosphate. Activation of Btk as monitored by elevation of phosphotyrosine content and a cellular transformation response was dramatically enhanced by coexpressing a weakly activated allele of Src (E378G) and the two subunits of PI 3-kinase-gamma. This activation correlates with new sites of phosphorylation on Btk identified by two-dimensional phosphopeptide mapping. Activation of Btk was dependent on the catalytic activity of all three enzymes and an intact Btk PH domain and Src transphosphorylation site. These combined data define Btk as a downstream target of PI 3-kinase-gamma and Src family kinases.