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-l 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-l stimulation by activated KSR, Here we show that phosphorylation of c-Raf-l on Thr(269) by KSR is necessary for optimal activation in response to EGF stimulation. In vitro, KSR specifically phosphorylated c-Raf-l on threonine residues during the first stage of the two-stage kinase assay. Using purified wild-type and mutant c-Raf-l proteins, we demonstrate that Th-269 is, the major c-Raf-l site phosphorylated by KSR in vitro and that phosphorylation of this site is essential for c-Raf-l activation by KSR, KSR acts via transphosphorylation, not by increasing c-Raf-l 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-l, Low dose EGF did not induce serine or tyrosine phosphorylation of c-Raf-l, High dose EGF (10-100 ng/ml) induced no additional Thr(269) phosphorylation, but rather increased c-Raf-l phosphorylation on serine residues and Tyr(340)/Tyr(341). A Raf-l mutant with valine substituted for Thr(269) was unresponsive to low dose EGF, but was serine- and Tyr(340)/Try(341)-phosphorylated and partially activated at high dose EGF. This study shows that Thr(269) is the major c-Raf-l site phosphorylated by KSR, Furthermore, phosphorylation of this site is essential for c-Raf-l activation by KSR in vitro and for optimal c-Raf-l activation in response to physiologic EGF stimulation in vivo.