Enhancing factor (EF), a molecule that increases the binding of epidermal growth factor (EGF) to A431 cells, was first isolated in our laboratory from mouse intestines, and subsequently shown to be a secretory form of phospholipase A2 (PLA2) [Mulherkar, Rao, Wagle, Patki and Deo (1993) Biochem. Biophys. Res. Commun. 195, 1254-1263]. We had proposed earlier that EF increases the binding of EGF by first binding to its own cell-surface receptor [identified as a 100 kDa molecule; Mulherkar and Deo (1986) J. Cell. Physiol. 127, 183-188], and then by creating a binding site for EGF. However, due to its PLA2 activity, there was a possibility that EF, by its phospholipase activity could be unmasking cryptic EGF receptors on the cell surface, thereby increasing the number of binding sites for EGF. To test whether enhancing activity and phospholipase activity are independent of each other, a series of mutations were created using the full-length EF cDNA as a template, expressed in 293 cells and the mutant recombinant proteins checked for EF as well as PLA2 activities. Our studies have shown that one of the mutant EF proteins, lacking PLA2 activity, retains EF activity. This demonstrates unambiguously that EF and PLA2 activities are two independent activities in the same molecule. Mutation in the Ca2+-binding loop resulted in loss of EF activity, thereby demonstrating that EF activity is Ca2+-dependent. The N-terminal region of the EF molecule appears to be crucial for the enhancing activity.