Vav2 is a member of the Vav family that serves as a guanine nucleotide exchange factor for the Rho family of Ras-related GTPases. Unlike Vav1, whose expression is restricted to cells of hematopoietic origin, Vav2 is broadly expressed. Recently, Vav2 has been identified as a substrate for the epidermal growth factor (EGF) receptor; however, the mechanism by which Vav2 is activated in EGF-treated cells is unclear. By the means of an in vitro protein kinase assay, we show here that purified and activated EGF receptor phosphorylates Vav2 exclusively on its N-terminal domain. Furthermore, EGF receptor phosphorylates Vav2 on all three possible phosphorylation sites, Tyr-142, Tyr-159, and Tyr-172. In intact cells we also show that Vav2 associates with the activated EGF receptor in an Src homology 2 domain-dependent manner, with Vav2 Src homology 2 domain binding preferentially to autophosphorylation sites Tyr-992 and Tyr-1148 of the EGF receptor. Treatment of cells with EGF results in stimulation of exchange activity of Vav2 as measured on Rac; however, the intensity of the exchange activity does not show any correlation with the level of Vav2 tyrosine phosphorylation. Introducing a point mutation into the Vav2 pleckstrin homology domain or treatment of cells with the phosphatidylinositol 3-kinase inhibitor LY294002 prior to EGF stimulation inhibits Vav2 exchange activity. Although phosphorylation mutants of Vav2 can readily induce actin rearrangement in COS7 cells, pleckstrin homology domain mutant does not stimulate membrane ruffling. These results suggest that EGF regulates Vav2 activity basically through phosphatidylinositol 3-kinase activation, whereas tyrosine phosphorylation of Vav2 may rather be necessary for mediating protein-protein interactions.