We recently established a two-stage in vitro assay for KSR kinase activity in which KSR never comes in contact with any recombinant kinase other than c-Raf-1 and defined the epidermal growth factor (EGF) as a potent activator of KSR kinase activity (Xing, H. R., Lozano, J., and Kolesnick, R. (2000) J. Biol. Chem. 275, 17276-17280). That study, however, did not address the mechanism of c-Raf-1 stimulation by activated KSR. Here we show that phosphorylation of c-Raf-1 on Thr(269) by KSR is necessary for optimal activation in response to EGF stimulation. In vitro, KSR specifically phosphorylated c-Raf-1 on threonine residues during the first stage of the two-stage kinase assay. Using purified wild-type and mutant c-Raf-1 proteins, we demonstrate that Thr(269) is the major c-Raf-1 site phosphorylated by KSR in vitro and that phosphorylation of this site is essential for c-Raf-1 activation by KSR. KSR acts via transphosphorylation, not by increasing c-Raf-1 autophosphorylation, as kinase-inactive c-Raf-1(K375M) served as an equally effective KSR substrate. In vivo, low physiologic doses of EGF (0.001-0.1 ng/ml) stimulated KSR activation and induced Thr(269) phosphorylation and activation of c-Raf-1. Low dose EGF did not induce serine or tyrosine phosphorylation of c-Raf-1. High dose EGF (10-100 ng/ml) induced no additional Thr(269) phosphorylation, but rather increased c-Raf-1 phosphorylation on serine residues and Tyr(340)/Tyr(341). A Raf-1 mutant with valine substituted for Thr(269) was unresponsive to low dose EGF, but was serine- and Tyr(340)/Tyr(341)-phosphorylated and partially activated at high dose EGF. This study shows that Thr(269) is the major c-Raf-1 site phosphorylated by KSR. Furthermore, phosphorylation of this site is essential for c-Raf-1 activation by KSR in vitro and for optimal c-Raf-1 activation in response to physiologic EGF stimulation in vivo.