Signaling via growth factor receptors frequently results in the concomitant activation of phospholipase C gamma (PLC gamma) and phosphatidylinositol (PI) 3-kinase. While it is well established that tyrosine phosphorylation of PLC gamma is necessary for its activation, we show here that PLC gamma is regulated additionally by the lipid products of PI 3-kinase. We demonstrate that the pleckstrin homology (PH) domain of PLC gamma binds to phosphatidylinositol 3,4,5-trisphosphate [PdtIns(3,4,5)P3], and is targeted to the membrane in response to growth factor stimulation, while a mutated version of this PH domain that does not bind PdtIns(3,4,5)P3 is not membrane targeted. Consistent with these observations, activation of PI 3-kinase causes PLC gamma PH domain-mediated membrane targeting and PLC gamma activation. By contrast, either the inhibition of PI 3-kinase by overexpression of a dominant-negative mutant or the prevention of PLC gamma membrane targeting by overexpression of the PLC gamma PH domain prevents growth factor-induced PLC gamma activation. These experiments reveal a novel mechanism for cross-talk and mutual regulation of activity between two enzymes that participate in the control of phosphoinositide metabolism.