Epidermal growth factor and platelet-derived growth factor can stimulate the production of the second messenger inositol trisphosphate in responsive cells, but the biochemical pathway for these signaling events has been uncertain because the reactions have not been reconstituted with purified molecules in vitro. A reconstitution is described that requires not only the growth factor, its receptor with tyrosine kinase activity, and the soluble phospholipase C-gamma 1, but also the small soluble actin-binding protein profilin. Profilin binds to the substrate phosphatidylinositol 4,5-bisphosphate and inhibits its hydrolysis by unphosphorylated phospholipase C-gamma 1. Phosphorylation of phospholipase C-gamma 1 by the epidermal growth factor receptor tyrosine kinase overcomes the inhibitory effect of profilin and results in an effective activation of phospholipase C-gamma 1.