We investigated the extent to which phosphatidylinositol 3-kinase (PI 3-kinase) and Rac, a member of the Rho family of small GTPases, are involved in the signaling cascade triggered by tumor necrosis factor (TNF)-alpha leading to activation of c-fos serum response element (SRE) and c-Jun amino-terminal kinase (JNK) in Rat-2 fibroblasts. Inhibition of PI 3-kinase by LY294002 or wortmannin, two specific PI 3-kinase antagonists, or co-transfection with a dominant negative mutant of PI 3-kinase dose-dependently blocked stimulation of c-fos SRE by TNF-alpha. Similarly, LY294002 significantly diminished TNF-alpha-induced activation of JNK, suggesting that nuclear signaling triggered by TNF-alpha is dependent on PI 3-kinase-mediated activation of both c-fos SRE and JNK. We also found nuclear signaling by TNF-alpha to be Rac-dependent, as demonstrated by the inhibitory effect of transient co-transfection with a dominant negative Rac mutant, RacN17. Our findings suggest that Rac is situated downstream of PI 3-kinase in the TNF-alpha signaling pathway to the nucleus, and we conclude that PI 3-kinase and Rac each plays a pivotal role in the nuclear signaling cascade triggered by TNF-alpha.