In a number of cell lines, epidermal growth factor (EGF) rapidly stimulates the breakdown of inositol phospholipids. Phosphatidylinositol-specific phospholipase C (PLC), therefore, plays an important role in this biological response to EGF, but the mechanism by which EGF-receptor complexes modulate the activation of PLC is not understood. We have previously suggested that tyrosine phosphorylation of PLC or an unknown PLC-associated protein by the EGF receptor is involved in the activation process (Wahl, M. I., Daniel, T. O., and Carpenter, G. (1988) Science 241, 968-970) and have recently shown by immunoprecipitation that the addition of EGF to 32P-labeled cells increases tyrosine and serine phosphorylation of PLC-II (Wahl, M. I., Nishibe, S., Suh, P.-G., Rhee, S. G., and Carpenter, G. (1989) Proc. Natl. Acad. Sci. U.S.A. 86, 1568-1572). In this communication we demonstrate that PLC-II (Mr = 145,000) purified from bovine brain can be phosphorylated in vitro in an EGF-dependent manner by the tyrosine kinase activity of the purified EGF receptor. While PLC-II is an efficient phosphorylation substrate for the purified EGF receptor, PLC-I is a poor substrate and PLC-III is not phosphorylated to any detectable extent. Though all three PLC isozymes possess typical tyrosine phosphorylation sequences, the EGF receptor is surprisingly selective in vitro for the phosphorylation of PLC-II. High performance liquid chromatography comparison of tryptic phosphotyrosyl peptides from PLC-II phosphorylated in vivo and in vitro indicated a similar pattern of multiple tyrosine phosphorylation sites. These findings show that the EGF receptor can directly phosphorylate PLC-II in an efficient and selective manner.