C3G is a guanine nucleotide exchange factor for Rap1 and is activated by the expression of Crk adaptor proteins. We found that expression of CrkI in COS cells induced significant tyrosine phosphorylation of C3G. To understand the mechanism by which C3G is phosphorylated and activated by Crk, we constructed a series of deletion mutants. Deletion of the amino terminus of C3G to amino acid 61 did not remarkably affect either tyrosine phosphorylation or Crk-dependent activation of C3G. When C3G was truncated to amino acid 390, C3G was still phosphorylated on tyrosine but was not effectively activated by CrkI. Deletion of the amino terminus of C3G to amino acid 579 significantly reduced the Crk-dependent tyrosine phosphorylation of C3G and increased GTP-bound Rap1 irrespective of the presence of CrkI. We substituted all seven tyrosine residues in this region, amino acids 391-579, for phenylalanine for identification of the phosphorylation site. Among the substitution mutants, the C3G-Y504F mutant, in which tyrosine 504 was substituted by phenylalanine, was remarkably less activated and phosphorylated than the wild type. All the other substitution mutants were activated and tyrosyl-phosphorylated by the expression of CrkI. Thus, CrkI activates C3G by the phosphorylation of tyrosine 504, which represses the cis-acting negative regulatory domain outside the catalytic region.