The role of Rac in epidermal growth factor (EGF)-induced c-fos serum response element (SRE) activation was examined in Rat-2 fibroblast cells. By reporter gene analysis following transient or stable transfections with pEXV-RacN17 encoding a dominant-negative mutant of Rac, EGF-induced activation of c-fos SRE-luciferase gene was shown to be selectively inhibited, suggesting that Rac activity is necessary for the full activation of SRE by EGF. Our further study to analyze the downstream mediator of Rac in EGF-signaling cascade demonstrated that there is a functional link between Rac and phospholipase A2 (PLA2) activation and further that PLA2 mediates, at least partly, the Rac signaling to SRE. Together, our results point to a critical role of Rac and Rac-activated PLA2 in the EGF-signaling cascade to c-fos SRE. We propose that 'Rac-PLA2' cascade is one of the major signaling pathways by which EGF stimulates c-fos SRE.