Raf kinase inhibitory protein (RKIP; also known as phosphatidylethanolamine-binding protein or PEBP) is a modulator of the Raf/MAPK signaling cascade and a suppressor of metastatic cancer. Here, we show that RKIP inhibits MAPK by regulating Raf-1 activation; specifically, RKIP acts subsequent to Raf-1 membrane recruitment, prevents association of Raf-1 and p21-activated kinase (PAK), and blocks phosphorylation of the Raf-1 kinase domain by PAK and Src family kinases. Mutation of the PAK and Src phosphorylation sites on Raf-1 to aspartate, a phosphate mimic, prevented RKIP association with or inhibition of Raf-1 signaling. Interestingly, although RKIP can interact with B-Raf, RKIP depletion had no effect on activation of B-Raf. Because c-Raf-1 and B-Raf are both required for maximal MAPK stimulation by epidermal growth factor in neuronal and epithelial cell lines, we determined whether RKIP significantly affects MAPK signaling. In fact, RKIP depletion increased not only the amplitude but also the sensitivity of MAPK and DNA synthesis to epidermal growth factor stimulation by up to an order of magnitude. These results indicate that selective modulation of c-Raf-1 but not B-Raf activation by RKIP can limit the dynamic range of the MAPK signaling response to growth factors and may play a critical role in growth and development.