Phosphatidylinositol 3-kinase (PI3K) is a heterodimeric enzyme comprising a p110 catalytic subunit and a p85 regulatory subunit. We have recently shown that the isolated p85 subunit exists as a dimer; therefore, we examined whether the heterodimeric enzyme was capable of further self-association. Size-exclusion chromatography demonstrated that PI3K was a 1:1 complex of p85 and p110 under native conditions. However, binding of a diphosphotyrosine-containing peptide that mimics an activated platelet-derived growth factor receptor beta induced an increase in the apparent molecular mass of PI3K. This increase was due to dimerization of PI3K and was dependent on PI3K concentration but not diphosphopeptide concentration. Dimer formation was also observed directly using fluorescence resonance energy transfer. Diphosphopeptide-induced activation of PI3K (Carpenter, C. L., Auger, K. R., Chanudhuri, M., Yoakim, M., Schaffhausen, B., Shoelson, S., and Cantley, L. C. (1993) J. Biol. Chem. 268, 9478-9483; Rordorf-Nikolic, T., Van Horn, D. J., Chen, D., White, M. F., and Backer, J. M. (1995) J. Biol. Chem. 270, 3662-3666) was not a direct result of dimerization and occurred only when phosphatidylinositol, and not phosphatidylinositol-4,5-diphosphate, was the phosphorylation substrate. Binding of the tandem SH2 domains of the p85 regulatory subunit to activated receptor tyrosine kinases therefore induces dimerization of PI3K, which may be an early step in inositol lipid-mediated signal transduction.