The fission yeast Schizosaccharomyces pombe has no detectable endogenous receptor tyrosine kinases or associated signalling apparatus, and we have used this cell system to reconstitute mammalian platelet-derived growth factor beta (PDGF beta) receptor-linked activation of phospholipase C gamma 2 (PLC gamma 2). The PDGF beta receptor migrates as a glycosylated protein of 165 kDa associated exclusively with membrane fractions. No tyrosine autophosphorylation was detected when PDGF beta was expressed alone. PLC gamma 2 appears as a 140-kDa protein distributed between particulate and soluble fractions which exhibits characteristic selectivity for phosphatidylinositol 4,5-bisphosphate and is sensitive to powerful activation by Ca2+. When coexpressed, both PDGF beta and PLC gamma 2 undergo tyrosine phosphorylation, and this is accompanied by a > 26-fold increase in [3H]inositol 4,5-biphosphate ([3H]IP2) and [3H]inositol 1,4,5-triphosphate [3H]IP3 production. Treatment with the tyrosine phosphatase inhibitor pervanadate further increased PLC gamma 2 tyrosine phosphorylation as well as [3H]IP2 and [3H]IP3 generation. Phosphorylated PLC gamma 2 was found predominantly in membrane fractions. To test a nonreceptor tyrosine kinase, we then expressed the human proto-oncogene c-src together with its negative regulator Csk. These were immunodetectable as bands at 60 kDa (c-Src) and 50 kDa (Csk) and distributed between membrane and cytosolic fractions. When yeast coexpressing c-Src, Csk, and PLC gamma 2 was incubated with pervanadate, PLC gamma 2 was tyrosine phosphorylated and [3H]IP2 and [3H]IP3 production increased 11.0- and 7.0-fold, respectively. Csk expressed alone with PLC gamma 2 was ineffective. Similar PLC gamma 2 activation was observed upon in vitro mixing with the extracts expressing either c-Src or the PDGF beta receptor. In summary, this is the first report of a reconstitution of mammalian tyrosine kinase-linked effector activation in yeast cells and also the first demonstration of direct PLC gamma 2 activation by the proto-oncogene c-src. These observations indicate that S. pombe provides a powerful cell system in which to study critical molecular interactions and activities underlying receptor and nonreceptor tyrosine kinase-dependent cell signaling.