The regulation of the two isoforms of phospholipase C-␥, PLC␥ 1 and PLC␥ 2 , by cell surface receptors involves protein tyrosine phosphorylation as well as interaction with adapter proteins and phosphatidylinositol 3,4,5-trisphosphate (PtdInsP 3 ) generated by inositol phospholipid 3-kinases (PI3Ks). All three processes may lead to recruitment of the PLC␥ isozymes to the plasma membrane and/or stimulation of their catalytic activity. Recent evidence suggests that PLC␥ may also be regulated by Rho GTPases. In this study, PLC␥ 1 and PLC␥ 2 were reconstituted in intact cells and in a cell-free system with Rho GTPases to examine their influence on PLC␥ activity. PLC␥ 2 , but not PLC␥ 1 , was markedly activated in intact cells by constitutively active Rac1 G12V , Rac2 G12V , and Rac3 G12V but not by Cdc42 G12V and RhoA G14V . The mechanism of PLC␥ 2 activation was apparently independent of phosphorylation of tyrosine residues known to be modified by PLC␥ 2 -activating protein-tyrosine kinases. Activation of PLC␥ 2 by Rac2 G12V in intact cells coincided with a translocation of PLC␥ 2 from the soluble to the particulate fraction. PLC␥ isozyme-specific activation of PLC␥ 2 by Rac GTPases (Rac1 ≈ Rac2 > Rac3), but not by Cdc42 or RhoA, was also observed in a cell-free system. Herein, activation of wild-type Rac GTPases with guanosine 5-(3-O-thio)triphosphate caused a marked stimulation of PLC␥ 2 but had no effect on the activity of PLC␥ 1 . PLC␥ 1 and PLC␥ 2 have previously been shown to be indiscriminately activated by PtdInsP 3 in vitro. Thus, the results suggest a novel mechanism of PLC␥ 2 activation by Rac GTPases involving neither protein tyrosine phosphorylation nor PI3K-mediated generation of PtdInsP 3 .Inositol phospholipid-specific phospholipases C (PLCs) 3 catalyze the hydrolysis of phosphatidylinositol 4,5-bisphosphate (PtdInsP 2 ) to produce inositol 1,4,5-trisphosphate and diacylglycerol. While the products of this reaction have long been known to act as intracellular second messengers (reviewed in Refs. 1-4), it has only recently become clear that the phospholipid substrate itself may also be considered an intracellular signaling molecule in that its local concentration in the plasma membrane and possibly in other cellular membranes regulates the activities and/or subcellular distribution of a number of regulatory or structural proteins. These include enzymes, ion channels and transporters, transcription factors, scaffolding proteins, cytoskeletal proteins, as well as proteins involved in the regulation of exocytosis, endocytosis, and membrane trafficking (reviewed in Refs. 5-8).The mammalian PLCs are divided into six subfamilies, designated , ␥, ␦, ⑀, , and (reviewed in Refs. 9 and 10). The four members of the PLC subfamily are activated by ␥ dimers of heterotrimeric G proteins and/or members of the ␣ q subfamily of G protein ␣ subunits and by certain Rho GTPases (11-14). The two members of the PLC␥ family are activated by receptor and nonreceptor protein-tyrosine kinases (reviewed in Refs. 9, 10, 15, ...