Phospholipase D (PLD) activity is elevated in response to the oncogenic stimulus of several signaling oncogenes. PLD activity is also elevated in response to peptide growth factors, indicating that PLD likely plays an important role in mitogenic signaling. Many proteins that mediate mitogenic signaling are localized in caveolin-enriched membrane microdomains (CEMMs). We report here that the elevated PLD activity in NIH 3T3 cells transformed by activated oncogenic forms of Src, Res, and Raf is largely restricted to the CEMMs. Likewise, the PLD activity stimulated by epidermal growth factor is also restricted to the CEMMs. Although both PLD1 and PLD2 were found in CEMMs, neither was particularly enriched in the CEMMs of the transformed relative to the parental cells, indicating that it is the specific activity of PLD that is increased in the CEMMs. An apparent PLD substrate specificity in transformed cells for phosphatidylcholine lacking arachidonate acyl groups is also explained by the localization of activity in the CEMMs where [H-3]arachidonate-labeled PC was excluded. These data indicate that mitogenic signals through PLD are initiated in CEMMs where many signaling molecules colocalize.