The role of phospholipase Cgamma1 (PLCgammal) in signal transduction was investigated by characterizing its SH domain-binding proteins that may represent components of a novel signaling pathway. A 180-kDa protein that binds to the SH2 domain of PLCgamma1 was purified from rat brain. The amino acid sequence of peptide derived from the purified protein is now identified as AP180, a clathrin assembly protein that has been implicated in clathrin-mediated synaptic vesicle recycling in synapses. In this report, we demonstrate the stable association of PLCgamma1 with AP180 in a clathrin-coated vesicle complex, which not only binds to the carboxyl-terminal SH2 domain of PLCgamma1, but also inhibits its enzymatic activity in a dose-dependent manner. (C) 2002 Elsevier Science.