In neocortical explants, E2 activates various signaling components of the MAPK cascade, including B-Raf and MAPK kinase-dependent ERK, suggesting a possible role in the differentiative actions of E2 in the brain. To further characterize the signaling pathways activated by E2, we determined whether c-Src, a member of the Src family of nonreceptor tyrosine kinases and an important modulator of both the MAPK cascade and neuronal differentiation, may play a role in E2 signaling. The present studies show for the first time in the brain that E2 elicits phosphorylation of c-Src on three functionally critical tyrosine residues (Y220, Y423, and Y534), and that this phosphorylation occurs despite disruption of ER alpha (in ER knockout mice). PP2, a Src family kinase inhibitor, suppressed not only E2-induced phosphorylation of c-Src, but ERK phosphorylation as well, suggesting that c-Src may be an upstream regulator of E2 signaling. E2-induced phosphorylation of c-Src is associated with increased tyrosine phosphorylation of Shc, increased association of Shc with Grb2, and induction of Ras, but not Rap1, activation. Together, these data provide evidence that E2 activates a novel c-Src-dependent signal transduction pathway in the developing brain.