Rapid activation of phospholipase C (PLC) with a resultant increase in phosphatidylinositol hydrolysis occurs after aggregation of the high affinity receptor for IgE (Fc epsilon RI) on the surface of mast cells. We previously described an increase in PLC activity associated with the particulate fraction of rat basophilic leukemia (RBL) cells after Fc epsilon RI aggregation, and this redistribution of enzyme activity correlated with an increase in immunoreactivity of the gamma 1 isozyme of PLC in the particulate fraction by Western blot analysis (J. Immunol. 148:2194-2200, 1992). We now report that the tyrosine phosphatase inhibitor orthovanadate mimics Fc epsilon RI-mediated activation of PLC-gamma 1 in RBL cells after permeabilization with Staphylococcus aureus alpha-toxin. Orthovanadate treatment of permeabilized cells induced: 1) a large increase in phosphoinositide hydrolysis in endogenously labeled cells; 2) an increase in PLC activity associated with the particulate fraction; and 3) an increase in immunoreactivity of PLC-gamma 1 in Western blots of the particulate fraction. In addition, incubation of RBL cells with either oligomeric IgE or orthovanadate results in the translocation of PLC-gamma 2 from the cytosol to the particulate fraction. All of the above effects were qualitatively similar to those seen after Fc epsilon RI aggregation. These data suggest that translocation and activation of PLC in mast cells are controlled by tyrosine phosphorylation of either the enzyme itself or some regulatory component. The equilibrium can be shifted to the phosphorylated state during either receptor-mediated activation of a tyrosine kinase or by blockade of dephosphorylation.