The Trk/Nerve Growth Factor receptor mediates the rapid activation of a number of intracellular signaling proteins, including phosphatidylinositol 3-kinase (PI 3-kinase). Here, we describe a novel, NGF-inducible system that we used to specifically address the signaling potential of endogenous PI 3-kinase in NGF-mediated neuronal survival and differentiation processes. This system utilizes a Trk receptor mutant (Trk(def)) lacking sequences Y490, Y785 and KFG important for the activation of the major Trk targets; SHC, PLC-gammal, Ras, PI 3-kinase and SNT. Trk(def) was kinase active but defective for NGF-induced responses when stably expressed in PC12nnr5 cells (which lack detectable levels of TrkA and are non-responsive to NGF). The PI 3-kinase consensus binding site, YxxM (YVPM), was introduced into the insert region within the kinase domain of Trk(def). NGF-stimulated tyrosine phosphorylation of the Trk(def)+PI 3-kinase addback receptor, resulted in the direct association and selective activation of PI 3-kinase in vitro and the production of PI(3,4)P2 and PI(3,4,5)P3 in vivo (comparable to wild-type). PC12nnr5 cells stably expressing Trk(def) + PI 3-kinase, initiated neurite outgrowth but failed to stably extend and maintain these neurites in response to NGF as compared to PC12 parental cells, or PC12nnr5 cells overexpressing wild-type Trk. However, Trk(def) + PI 3-kinase was fully competent in mediating NGF-induced survival processes. We propose that while endogenous PI 3-kinase can contribute in part to neurite initiation processes, its selective activation and subsequent signaling to downstream effectors such as Akt, functions mainly to promote cell survival in the PC12 system.