Antigen receptor ligation on lymphocytes activates protein tyrosine kinases and phospholipase C-gamma (PLC-gamma) isoforms. Glutathione S-transferase fusion proteins containing the C-terminal Src-homology 2 [SH2(C)] domain of PLC-gamma1 bound to tyrosyl phosphorylated Syk. Syk isolated from antigen receptor-activated B cells phosphorylated PLC-gamma1 on Tyr-771 and the key regulatory residue Tyr-783 in vitro, whereas Lyn from the same B cells phosphorylated PLC-gamma1 only on Tyr-771. The ability of Syk to phosphorylate PLC-gamma1 required antigen receptor ligation, while Lyn was constitutively active. An mCD8-Syk cDNA construct could be expressed as a tyrosyl-phosphorylated chimeric protein tyrosine kinase in COS cells, was recognized by PLC-gamma1 SH2(C) in vitro, and induced tyrosyl phosphorylation of endogenous PLC-gamma1 in vivo. Substitution of Tyr-525 and Tyr-526 at the autophosphorylation site of Syk in mCD8-Syk substantially reduced the kinase activity and the binding of this variant chimera to PLC-gamma1 SH2(C) in vitro; it also failed to induce tyrosyl phosphorylation of PLC-gamma1 in vivo. In contrast, substitution of Tyr-348 and Tyr-352 in the linker region of Syk in mCD8-Syk did not affect the kinase activity of this variant chimera but almost completely eliminated its binding to PLC-gamma1 SH(C) and completely eliminated its ability to induce tyrosyl phosphorylation of PLC-gamma1 in vivo. Thus, an optimal kinase activity of Syk and an interaction between the linker region of Syk with PLC-gamma1 are required for the tyrosyl phosphorylation of PLC-gamma1.