Vav and Sos1 are Dbl family guanine nucleotide exchange factors, which activate Rho family GTPases in response to phosphatidylinositol 3-kinase products. A pleckstrin homology domain adjacent to the catalytic Dbl homology domain via an unknown mechanism mediates the effects of phosphoinositides on guanine nucleotide exchange activity. Here we tested the possibility that phosphatidylinositol 3-kinase substrates and products control an interaction between the pleckstrin homology domain and the Dbl homology domain, thereby explaining the inhibitory effects of phosphatidylinositol 3-kinase substrates and stimulatory effects of the products. Binding studies using isolated fragments of Vav and Sos indicate phosphatidylinositol 3-kinase substrate promotes the binding of the pleckstrin homology domain to the Dbl homology domain and blocks Rac binding to the DH domain, whereas phosphatidylinositol 3-kinase products disrupt the Dbl homology/pleckstrin homology interactions and permit Rac binding. Additionally, Lck phosphorylation of Vav, a known activating event, reduces the affinities between the Vav Dbl homology and pleckstrin homology domains and permits Rac binding. We also show Vav activation in cells, as monitored by phosphorylation of Vav, Vav association with phosphatidylinositol 3,4,5-trisphosphate, and Vav guanine nucleotide exchange activity, is blocked by the phosphatidylinositol 3-kinase inhibitor wortmannin. These results suggest the molecular mechanisms for activation of Vav and Sos1 require disruption of inhibitory intramolecular interactions involving the pleckstrin homology and Dbl homology domains.