Thrombospondin is an extracellular matrix protein involved in modulating cell adhesion. Thrombospondin stimulates a rapid loss of focal adhesion plaques and reorganization of the actin cytoskeleton in cultured bovine aortic endothelial cells. The focal adhesion labilizing activity of thrombospondin is localized to the amino-terminal domain, specifically amino acids 17-35. Use of a synthetic peptide (hep I), containing amino acids 17- 35 of thrombospondin: enables us to examine the signaling mechanisms specifically involved in thrombospondin-induced disassembly of focal adhesions. We tested the hypothesis that activation of phosphoinositide 3- kinase is a necessary step in the thrombospondin-induced signaling pathway regulating focal adhesion disassembly. Both wortmannin and LY294002, membrane permeable inhibitors of phosphoinositide 3-kinase activity, blocked hep I- induced disassembly of focal adhesions. Similarly, wortmannin inhibited hep I-mediated actin microfilament reorganization and the hep I-induced translocation of α-actinin from focal adhesion plaques. Hep I also stimulated phosphoinositide 3-kinase activity approximately 2-3-fold as measured in anti-phosphoinositide 3-kinase and anti-phosphotyrosine immunoprecipitates. Increased immunoreactivity for the 85-kDa regulatory subunit in anti-phosphotyrosine immunoprecipitates suggests that the p85/p110 form of phosphoinositide 3-kinase is involved in this pathway. In 32P(i)- labeled cells, hep I increased levels of phosphatidylinositol (3,4,5)- trisphosphate, the major product of phosphoinositide 3-kinase phosphorylation. These results suggest that thrombospondin signals the disassembly of focal adhesions and reorganization of the actin cytoskeleton by a pathway involving stimulation of phosphoinositide 3-kinase activity.