Although activating mutations of fibroblast growth factor receptor 3 (FGFR3) are frequent in bladder tumors, little information is available on their specific effects in urothelial cells or the basis for the observed mutation spectrum. We investigated the phenotypic and signaling consequences of three FGFR3 mutations (S249C, Y375C, and K652E) in immortalized normal human urothelial cells (TERT-NHUC) and mouse fibroblasts (NIH-3T3). In TERT-NHUC, all mutant forms of FGFR3 induced phosphorylation of FRS2alpha and ERK1/2, but not AKT or SRC. PLCgamma1 phosphorylation was only observed in TERT-NHUC expressing the common S249C and Y375C mutations, and not the rare K652E mutation. Cells expressing S249C and Y375C FGFR3 displayed an increased saturation density, related to increased proliferation and viability. This effect was significantly dependent on PLCgamma1 signaling and undetectable in cells expressing K652E FGFR3, which failed to phosphorylate PLCgamma1. In contrast to TERT-NHUC, expression of mutant FGFR3 in NIH-3T3 resulted in phosphorylation of Src and Akt. In addition, all forms of mutant FGFR3 were able to phosphorylate Plcgamma1 and induce morphological transformation, cell proliferation, and anchorage-independent growth. Our results indicate that the effects of mutant FGFR3 are both cell type specific and mutation specific. Mutant FGFR3 may confer a selective advantage in the urothelium by overcoming normal contact inhibition of proliferation.