The neutrophil nicotinamide adenine dinucleotide phosphate-oxidase is a multisubunit enzyme (comprising gp91(phox), p22(phox), p67(phox), p40(phox), p47(phox), and Rac) that plays a vital role in microbial killing. The recent discovery of a chronic granulomatous disease patient who expresses a mutant p40(phox) subunit, together with the development of mouse models of p40(phox) function, indicate phosphatidylinositol 3-phosphate binding to the PX domain of p40(phox) is an important signal for oxidase activation. However, the presence of other conserved residues and domains in p40(phox) suggest further regulatory roles for this protein. To test this, we introduced wild-type and mutated versions of p40(phox) into fully differentiated mouse neutrophils by retroviral transduction of p40(phox)(-/-) bone marrow progenitors and repopulation of the bone marrow compartment in radiation chimaeras. Phosphorylation of p40(phox) on threonine 154, but not serine 315, was required for full oxidase activation in response to formylated bacterial peptide fMLP, serum-opsonized S aureus, and immunoglobulin-opsonized sheep red blood cells. A functional SH3 domain was not required for oxidase activation, and deletion of the entire domain resulted in enhanced oxidase responses. Phosphorylation of threonine 154 in response to S aureus was mediated by protein kinase Cδ and was required for full translocation of p47(phox) to phagosomes. These results define an important new element in the physiological activation of the oxidase.