Binding of platelet-derived growth factor (PDGF) to the PDGF receptor (PDGFR) beta subunit triggers receptor tyrosine phosphorylation and the stable association of a number of signal transduction molecules, including phospholipase C gamma (PLC gamma), the GTPase activating protein of ras (GAP), and phosphatidylinositol-3 kinase (PI3K). Previous reports have identified three PDGFR tyrosine phosphorylation sites in the kinase insert domain that are important for stable association of GAP and PI3K. Two of them, tyrosine (Y) 740, and Y-751 are required for the stable association of PI3K, while Y-771 is required for binding of GAP. Here we present data for two additional tyrosine phosphorylation sites, Y-1009 and Y-1021, that are both in the carboxy-terminal region of the PDGFR. Characterization of PDGFR mutants in which these phosphorylation sites are substituted with phenylalanine (F) indicated that Y-1021 and Y-1009 were required for the stable association of PLC gamma and a 64-kDa protein, respectively. An F-1009/F-1021 double mutant selectively failed to bind both PLC gamma and the 64-kDa protein, whereas all of the carboxy-terminal mutants bound wild-type levels of GAP and PI3K. The carboxy terminus encodes the complete binding site for PLC gamma, since a phosphorylated carboxy-terminal fusion protein selectively bound PLC gamma. To determine the biological consequences of failure to associate with PLC gamma, we measured PDGF-dependent inositol phosphate production and initiation of DNA synthesis. The PDGFR mutants that failed to associate with PLC gamma were not able to mediate the PDGF-dependent production of inositol phosphates. Since tyrosine phosphorylation of PLC gamma enhances its enzymatic activity, we speculated that PDGFR mutants that failed to activate PLC gamma were unable to mediate its tyrosine phosphorylation. Surprisingly, the F-1021 receptor mediated readily detectable levels of PDGF-dependent PLC gamma tyrosine phosphorylation. Thus, the production of inositol phosphates requires not only PLC gamma tyrosine phosphorylation but also its association with the PDGFR. Comparison of the mutant PDGFRs' abilities to initiate PDGF-dependent DNA synthesis indicated that failure to associate with PLC gamma and produce inositol phosphates diminished the mitogenic response by 30%. In contrast, preventing the PDGFR from binding the 64-kDa protein did not compromise PDGF-triggered DNA synthesis at saturating concentrations of PDGF. Thus, it appears that phosphorylation of the PDGFR at Y-1021 is required for the stable association of PLC gamma to the receptor's carboxy terminus, the production of inositol phosphates, and initiation of the maximal mitogenic response.