Hepatocytes maintained in primary culture for periods of 1 to 24 hours exhibited a rapid decline in epidermal growth factor (EGF)-induced activation of phospholipase C (PLC), as was evident in a loss of EGF-induced inositol 1,4,5-trisphosphate (IP3) formation and mobilization of Ca2+ from intracellular Ca2+ stores. The loss of PLC activation was not the result of a decrease in EGF receptor or phospholipase C-gamma1 (PLC gamma1) protein levels, nor the result of a loss of tyrosine phosphorylation of these proteins, but was associated with a decrease in EGF-induced translocation of PLC gamma1 to the Triton-insoluble fraction, presumably reflecting binding to the actin cytoskeleton. Disruption of F-actin by treatment of cultured hepatocytes with cytochalasin D recovered the EGF-induced IP3 formation and Ca2+ mobilization to the same level and with the same dose-response relationship as was obtained in freshly isolated cells. Analysis of PLC gamma1 colocalization with F-actin by confocal microscopy showed that PLC gamma1 was mostly distributed diffusely in the cytosol, both in freshly plated cells and in cells in culture for 24 hours, despite marked differences in actin structures, EGF stimulation caused a modest redistribution of PLC gamma1 and a detectable increase in colocalization with cortical actin structures in freshly plated cells or in cytochalasin D-treated cells, but in cells that had been maintained and spread in culture only a limited PLC gamma1 relocation was detected to specific actin-structure associated with lamellipodia and membrane ruffles. We conclude that actin cytoskeletal structures can exert negative control over PLC gamma1 activity in hepatocytes and the interaction of the enzyme with specific actin structures dissociates PLC gamma1 tyrosine phosphorylation from activation of its enzymatic activity.