The superoxide-producing phagocyte NADPH oxidase can be activated by arachidonic acid (AA) or by phosphorylation of p47(phox) under cell-free conditions. The molecular mechanism underlying the activation, however, has remained largely unknown. Here we demonstrate that AA, at high concentrations (50-100 micrometer), induces direct interaction between the oxidase factors p47(phox) and p22(phox) in parallel with superoxide production. The interaction, being required for the oxidase activation, is mediated via the Src homology 3 (SH3) domains of p47(phox) (p47-(SH3)(2)), which are intramolecularly masked in a resting state. We also show that AA disrupts complexation of p47-(SH3)(2) with its intramolecular target fragment (amino acids 286-340) without affecting association of p47-(SH3)(2) with p22(phox), indicating that the disruption plays a crucial role in the induced interaction with p22(phox). Phosphorylation of p47(phox) by protein kinase C partially replaces the effects of AA; treatment of the SH3 target fragment with PKC in vitro results in a completely impaired interaction with p47-(SH3)(2), and the same treatment of the full-length p47(phox) leads to both interaction with p22(phox) and oxidase activation without AA, but to a lesser extent. Furthermore, phosphorylated p47(phox) effectively binds to p22(phox) and activates the oxidase in the presence of AA at low concentrations (1-5 micrometer), where an unphosphorylated protein only slightly supports superoxide production. Thus AA, at high concentrations, fully induces the interaction of p47(phox) with p22(phox) by itself, whereas, at low concentrations, AA synergizes with phosphorylation of p47(phox) to facilitate the interaction, thereby activating the NADPH oxidase.