Plasma membranes were isolated from A431 cells previously labelled with myo-[3H]inositol during exponential growth, using a rapid procedure on Percoll gradients. They displayed a significant phospholipase (PLC) activity against phosphoinositides, which was stimulated by guanosine 5'-O-(3-thiotriphosphate) (GTP gamma S), epidermal growth factor (EGF) and fetal calf serum (FCS) (24%, 11% and 97% over controls, respectively). The effect of EGF was not significantly increased by GTP gamma S. Upon addition of cytosol, EGF promoted an almost 100% stimulation of inositol 1,4,5-trisphosphate and inositol bisphosphate generation, which displayed an absolute requirement for GTP gamma S. This dose-dependent effect of cytosol was linear until 60 micrograms/ml of cytosolic protein and decreased afterwards; it was abolished by heat treatment and trypsin hydrolysis, and it was not reproduced by an identical amount of bovine serum albumin. The same biphasic stimulation was observed with phosphotyrosyl proteins immunopurified from cytosol of A431 cells previously stimulated by EGF. Since phosphotyrosyl proteins displayed PLC activity, our data suggest that soluble protein substrates of EGF receptor tyrosine kinase, including PLC, could be involved in the regulation of phosphoinositide hydrolysis in response to EGF. Using phosphatidyl[3H]inositol 4,5-bisphosphate (PIP2) dispersed with unlabelled phosphatidylethanolamine and phosphatidylserine as an exogenous substrate, no stimulation of PLC activity by EGF could be detected, either with membranes or with membranes plus cytosol. It is concluded that EGF might stimulate hydrolysis of phosphoinositides by PLC through complex interactions between plasma membrane and cytosolic factors which still remain to be identified.