Several receptor-mediated signal transduction pathways, including EGF and IgE receptor pathways, have been proposed to be spatially restricted to plasma membrane microdomains. However, the experimental evidence for signaling events in these microdomains is largely based on biochemical fractionation and immunocytochemical studies and only little is known about their spatial dynamics in living cells. Here we constructed green fluorescent protein-tagged SH2 domains to investigate where and when IgE receptor (FcepsilonRI)-mediated tyrosine phosphorylation occurs in living tumor mast cells. Strikingly, within minutes after antigen addition, tandem SH2 domains from Syk or PLC-gamma1 translocated from a uniform cytosolic distribution to punctuate plasma membrane microdomains. Colocalization experiments showed that the microdomains where tyrosine phosphorylation occurred were indistinguishable from those stained by cholera toxin B, a marker for glycosphingolipids. Competitive binding studies with coelectroporated unlabeled Syk, PLC-gamma1, and other SH2 domains selectively suppressed the induction of IgE receptor-mediated calcium signals as well as the binding of the fluorescent SH2 domains. This supports the hypothesis that PLC-gamma1 and Syk SH2 domains selectively bind to Syk and IgE receptors, respectively. Unlike the predicted prelocalization of EGF receptors to caveolae microdomains, fluorescently labeled IgE receptors were found to be uniformly distributed in the plasma membrane of unstimulated cells and only transiently translocated to glycosphingolipid rich microdomains after antigen addition. Thus, these in vivo studies support a plasma membrane signaling mechanism by which IgE receptors transiently associate with microdomains and induce the spatially restricted activation of Syk and PLC-gamma1.