Several observations indicate that the Raf-1 kinase is a downstream effector of protein kinase C-ε (PKCε). We recently have shown that Raf-1 is constitutively activated in PKCε transformed Rat6 fibroblasts, and transformation can be reverted by expression of a dominant negative Raf-1, but not a dominant negative Ras mutant (Cacace et al., 1996). Cai et al. (1997) demonstrated that PKCε induced proliferation of NIH3T3 cells is independent of Ras or Src, but depends on Raf-1. These authors further suggested that PKCε activates Raf-1 by direct phosphorylation. Here we have investigated the functional interaction between PKCε and Raf-1. PKCε, but not PKCα, was found to bind to the Raf-1 kinase domain. The association appeared to be direct, as it could be reconstituted in vitro with purified proteins. Raf-1 and PKCε could be co-precipitated from Sf-9 insect cells and PKCε transformed NIH313 cells (NIH/ε). The association was negatively regulated by ATP in vitro and by TPA treatment in NIH/ε cells, but not in Sf-9 insect cells. Raf-1 was constitutively activated in NIH/ε cells. However, using coexpression experiments in Sf-9 cells and transiently transfected A293 cells we did not obtain any evidence for a direct activation of Raf-1 by PKCε. PKCε did not induce translocation of Raf-1 to the membrane. Furthermore, PKCε did not activate Raf-1 nor enhance the kinase activity of Raf-1 that had been pre-activated by coexpression of Ras or the Lck tyrosine kinase. In contrast, conditioned media from PKCε transformed cells induced a robust activation of Raf-1. This activation could be partially reproduced by recombinant TGFβ, a growth factors secreted by PKCε transformed Rat6 cells. In conclusion, our results suggest that PKCε stimulates Raf-1 indirectly by inducing the production of autocrine growth factors.