Phospholipase Cε (PLCε) has been characterized as a direct effector of Ras in vitro and in cellular systems; however, the role of PLCε in tumorigenesis and its link to Ras in this context remain unclear. To assess the role of PLCε in Ras-driven cancers, we generated two new mouse strains: one carrying a targeted deletion of Plce (Plce(-/-)) and the other carrying mutant alleles of Plce unable to bind to Ras (Plce(RAm/RAm)). The Plce(-/-) and, to a lesser degree, Plce(RAm/RAm) transgenic mice exhibited increased susceptibility to tumor formation in the two-stage skin carcinogenesis protocol, revealing a tumor suppressor function for this PLC. This result also suggests that in this context Ras binding in part regulates functions of PLCε. Although significant differences were not seen in the LSL-Kras(G12D) nonsmall cell lung carcinoma model, down-regulation of PLCε was found in animal tumors and in cellular systems following expression of the oncogenic Ras. An inhibitory impact of PLCε on cell growth requires intact lipase activity and is likely mediated by protein kinase C enzymes. Further cellular studies suggest involvement of histone deacetylase in the mechanism of PLCε down-regulation. Taken together, our results show a previously unidentified tumor suppressor role for this PLC in animal models and, together with observations of marked down-regulation in colorectal, lung, and skin tumors, suggest its use as a biological marker in cancer.