Phospholipase C gamma isozymes (PLC gamma 1 and PLC gamma 2) have a crucial role in the regulation of a variety of cellular functions. Both enzymes have also been implicated in signaling events underlying aberrant cellular responses. Using N-ethyl-N-nitrosourea (ENU) mutagenesis, we have recently identified single point mutations in murine PLC gamma 2 that lead to spontaneous inflammation and autoimmunity. Here we describe further, mechanistic characterization of two gain-of-function mutations, D993G and Y495C, designated as ALI5 and ALI14. The residue Asp-993, mutated in ALI5, is a conserved residue in the catalytic domain of PLC enzymes. Analysis of PLC gamma 1 and PLC gamma 2 with point mutations of this residue showed that removal of the negative charge enhanced PLC activity in response to EGF stimulation or activation by Rac. Measurements of PLC activity in vitro and analysis of membrane binding have suggested that ALI5-type mutations facilitate membrane interactions without compromising substrate binding and hydrolysis. The residue mutated in ALI14 (Tyr-495) is within the spPH domain. Replacement of this residue had no effect on folding of the domain and enhanced Rac activation of PLC gamma 2 without increasing Rac binding. Importantly, the activation of the ALI14-PLC gamma 2 and corresponding PLC gamma 1 variants was enhanced in response to EGF stimulation and bypassed the requirement for phosphorylation of critical tyrosine residues. ALI5- and ALI14-type mutations affected basal activity only slightly; however, their combination resulted in a constitutively active PLC. Based on these data, we suggest that each mutation could compromise auto-inhibition in the inactive PLC, facilitating the activation process; in addition, ALI5-type mutations could enhance membrane interaction in the activated state.