We have investigated the relationship between hydrolysis of phosphatidylcholine (PC) and activation of the Raf-1 protein kinase in Ras-mediated transduction of mitogenic signals. As previously reported, cotransfection of a PC-specific phospholipase C (PC-PLC) expression plasmid bypassed the block to cell proliferation resulting from expression of the dominant inhibitory mutant Ras N-17. In contrast, PC-PLC failed to bypass the inhibitory effect of dominant negative Raf mutants, suggesting that PC-PLC functions downstream of Ras but upstream of Raf. Consistent with this hypothesis, treatment of quiescent cells with exogenous PC-PLC induced Raf activation, even when normal Ras function was blocked by Ras N-17 expression. Further, activation of Raf in response to mitogenic growth factors was blocked by inhibition of endogenous PC-PLC. Taken together, these results indicate that hydrolysis of PC mediates Raf activation in response to mitogenic growth factors.