Phospholipase C-gamma1 (PLC-gamma1) plays pivotal roles in cellular growth and proliferation. Upon the stimulation of growth factors and hormones, PLC-gamma1 is rapidly phosphorylated at three known sites; Tyr771, Tyr783 and Tyr1254 and its enzymatic activity is up-regulated. In this study, we demonstrate for the first time that Grb2, an adaptor protein, specifically interacts with tyrosine-phosphorylated PLC-gamma1 at Tyr783. The association of Grb2 with PLC-gamma1 was induced by the treatment with epidermal growth factor (EGF). Replacement of Tyr783 with Phe completely blocked EGF-induced interaction of PLC-gamma1 with Grb2, indicating that tyrosine phosphorylation of PLC-gamma1 at Tyr783 is essential for the interaction with Grb2. Interestingly, the depletion of Grb2 from HEK-293 cells by RNA interference significantly enhanced increased EGF-induced PLC-gamma1 enzymatic activity and mobilization of the intracellular Ca2+, while it did not affect EGF-induced tyrosine phosphorylation of PLC-gamma1. Furthermore, overexpression of Grb2 inhibited PLC-gamma1 enzymatic activity. Taken together, these results suggest Grb2, in addition to its key function in signaling through Ras, may have a negatively regulatory role on EGF-induced PLC-gamma1 activation.