The c-Abl nonreceptor tyrosine kinase is activated by growth factor signals such as the platelet-derived growth factor (PDGF) and functions downstream of the PDGF-beta receptor (PDGFR) to mediate biological processes such as membrane ruffling, mitogenesis, and chemotaxis. Here, we show that the related kinase Arg is activated downstream of PDGFRs in a manner dependent on Src family kinases and phospholipase C gamma1 (PLC-gamma1)-mediated phosphatidylinositol 4,5-bisphosphate (PIP2) hydrolysis, as we showed previously for c-Abl. PIP2, a highly abundant phosphoinositide known to regulate cytoskeletal and membrane proteins, inhibits the tyrosine kinase activities of both Arg and c-Abl in vitro and in cells. We now demonstrate that c-Abl and Arg form inducible complexes with and are phosphorylated by the PDGFR tyrosine kinase in vitro and in vivo. Moreover, c-Abl and Arg, in turn, phosphorylate the PDGFR. We show that c-Abl and Arg exhibit nonredundant functions downstream of the activated PDGFR. Reintroduction of c-Abl into Arg-Abl double-null fibroblasts rescues the ability of PLC-gamma1 to increase PDGF-mediated chemotaxis, while reexpression of Arg fails to rescue the chemotaxis defect. These data show that, although both kinases are activated and form complexes with proteins in the PDGFR signaling pathway, only c-Abl functions downstream of PLC-gamma1 to mediate chemotaxis.