Addition of epidermal growth factor to A431 cells results in dramatic changes in cell morphology. Initially the cells form membrane ruffles accompanied by increased actin polymerization, followed by cell rounding. Activation of the tyrosine kinase of the receptor by binding epidermal growth factor leads also to phosphorylation and activation of phospholipase C-gamma 1, a key enzyme in the phosphoinositide pathway. In this study we have investigated the localization of phospholipase C-gamma 1 during cell activation by epidermal growth factor. It is shown that addition of the growth factor to A431 cells leads to a translocation of phospholipase C-gamma 1 from the cytosol to the membrane fraction. Interestingly, this relocation is exclusively directed to the membrane ruffles. Most of the phospholipase C-gamma 1 associates to the membrane and a small fraction to the underlying skeleton. Immunocytochemical studies demonstrated that phospholipase C-gamma 1 co-localizes with the epidermal growth factor receptor and also filamentous actin at the membrane ruffles. Moreover, using anti-phosphotyrosine antibodies we found that the membrane ruffles are significantly enriched in phosphotyrosyl proteins. Between 5 and 10 minutes after stimulation the membrane ruffles disappear and also the co-localization of phospholipase C-gamma 1 with the epidermal growth factor receptor and filamentous actin. These results support the notion that activation of A431 cells by epidermal growth factor leads to the formation of a signalling complex of its receptor, phospholipase C-gamma 1 and filamentous actin which is primarily localized at membrane ruffles.