In kidney epithelial cells, an angiotensin II (Ang II) type 2 receptor subtype (AT2) is linked to a membrane-associated phospholipase A2 (PLA2) and the mitogen-activated protein kinase (MAPK) superfamily. However, the intervening steps in this linkage have not been determined. The aim of this study was to determine whether arachidonic acid mediates Ang II's effect on p21ras and if so, to ascertain the signaling mechanism(s). We observed that Ang II activated p21ras and that mepacrine, a phospholipase A2 inhibitor, blocked this effect. This activation was also inhibited by PD123319, an AT2 receptor antagonist but not by losartan, an AT1 receptor antagonist. Furthermore, Ang II caused rapid tyrosine phosphorylation of Shc and its association with Grb2. Arachidonic acid and linoleic acid mimicked Ang II-induced tyrosine phosphorylation of Shc and activation of p21ras. Moreover, Ang II and arachidonic acid induced an association between p21ras and Shc. We demonstrate that arachidonic acid mediates linkage of a G protein-coupled receptor to p21ras via Shc tyrosine phosphorylation and association with Grb2/Sos. These observations have important implications for other G protein-coupled receptors linked to a variety of phospholipases.