Stimulation of Nb2 cells with PRL results in the rapid phosphorylation of a 120-kDa protein identified as the adapter protein cbl on tyrosine residues. Maximal phosphorylation of cbl occurs at 20 min after PRL stimulation and declines thereafter. Stimulation with as little as 5 nM PRL resulted in the phosphorylation of cbl; increasing the concentration of PRL to 100 nM had only a minimal effect upon the phosphorylation of cbl. The cbl protein appears to be constitutively associated with grb2 and the p85 subunit of phosphatidylinositol 3-kinase (PI 3-kinase). The constitutive association of cbl with the p85 subunit of PI 3-kinase was observed in Nb2 cells as well as in 32Dcl3 cells transfected with either the rat Nb2 (intermediate) form of the PRL receptor or the long form of the human PRL receptor. A glutathione S-transferase fusion protein encoding the SH3 domain of the p85 subunit of PI 3-kinase bound to cbl in lysates of both unstimulated and PRL-stimulated Nb2 cells; however, neither of the SH2 domains of p85 bound to cbl under the same conditions. PRL stimulation increased the cbl-associated PI kinase activity. The majority of PI kinase activity appeared to be cbl-associated after PRL stimulation. These results suggest that cbl may function as an adapter protein in PRL-mediated signaling events and regulate activation of PI 3-kinase. Our model suggests that the p85 subunit of PI 3-kinase is constitutively associated with cbl through binding of the p85 SH3 domain to a proline-rich sequence in cbl. After the tyrosine phosphorylation of cbl, an SH2 domain(s) of p85 binds to a specific phosphorylation site(s) in cbl, leading to the activation of PI 3-kinase.