Transglutaminase activity was detected in lysates of A431 cells, a human epidermal carcinoma cell line. Enzyme activity was increased 1.5-2.5-fold in lysates prepared from cells pretreated with epidermal growth factor (EGF) relative to untreated control cells. Half-maximal activation of the transglutaminase activity occurred at 3-5 nM EGF, a concentration in good agreement with the Kd for EGF binding to its receptor in these cells. The increase in transglutaminase activity could be detected as early as 2 min after the addition of EGF, with the maximal response attained by 30 min. The activation was not blocked by pretreatment of the cells with cycloheximide, suggesting that the increased activity was not the result of an induction of transglutaminase synthesis. Fractionation of A431 cell lysates by centrifugation at 100000g for 30 min demonstrated that 90% of the transglutaminase activity was present in the soluble fraction and that this soluble transglutaminase activity was increased after treatment of the cells with EGF. The demonstration that EGF acutely increases the activity of a soluble, intracellular transglutaminase defines a novel pathway of growth factor action and provides a useful model system for identifying and comparing the mechanism(s) by which growth factors activate soluble enzymes.