Children with neurofibromatosis (NF1) typically develop central nervous system (CNS) abnormalities, including aberrant proliferation of astrocytes and formation of benign astrocytomas. The NF1 gene encodes neurofibromin, a Ras-GAP, highly expressed in developing neural cells; the mechanism of regulation of neurofibromin as a Ras-GAP, remains however unknown. We now show that, in response to EGF, neurofibromin is in vivo phosphorylated on serine residues by PKC-a, in human, rat, and avian CNS cells and cell lines. EGF-induced PKC phosphorylation was prominent in the cysteine/serine-rich domain (CSRD) of neurofibromin, which lies in the Nterminus and upstream of the Ras-GAP domain (GRD), and this modification significantly increased the association of neurofibromin with actin in co-immunoprecipitations. In addition, we show that Ras activation in response to EGF was significantly lowered when C62B cells overexpressed a construct encoding both CSRD þ GRD. Moreover, when PKC-a was downregulated, the Ras-GAP activity of CSRD þ GRD was significantly diminished, whereas overexpressed GRD alone acted as a weaker GAP and in a PKC-independent manner. Most importantly, functional Ras inhibition and EGF signaling shifts were established at the single cell level in C6-derived cell lines stably overexpressing CSRD þ GRD, when transient co-overexpression of Ras and PKC-depletion prior to stimulation with EGF-induced mitosis. Taken together, these data provide the first evidence of a functional, allosteric regulation of GRD by CSRD, which requires neurofibromin phosphorylation by PKC and association with the actin cytoskeleton. Our data may suggest a novel mechanism for regulating biological responses to EGF and provide a new aspect for the understanding of the aberrant proliferation seen in the CNS of children with NF1.