Thyrotropin (TSH) stimulates survival and growth of thyroid cells via a seven transmembrane G protein-coupled receptor. TSH elevates the intracellular cyclic AMP (cAMP) levels activating protein kinase A (PKA). Recent evidence indicates that p21 Ras is required for TSH-induced mitogenesis, but the molecular mechanism(s) is not known. Here we report that Ras p21 activity is necessary for the Go- G1 transition in TSH induced cycle and that the downstream effector of Ras upon TSH signaling is p85-p110 PI3K. We show that PI3K inhibitors block TSH-induced DNA synthesis, cAMP-PKA stimulate the formation of the complex PI3K-p21 Ras and reduce the complex Ras-Raf1 in thyroid and other cells types. Moreover, PKA phosphorylates immunoprecipitated p85 and PKA phosphorylation of cell extracts significantly stimulates the formation of the complex PI3K-Ras. We suggest that PKA phosphorylates p85 and stabilizes the complex p110-p85, enhancing the interaction PI3K and p21 Ras. Simultaneously, cAMP inhibits Raf-1-ERK signaling by decreasing Raf1 availability to Ras. Under these circumstances PI3K signaling is favored. These results indicate that PI3K is an important mediator of Ras effects in cAMP-induced proliferation and illustrates how cAMP can selectively influence Ras effector pathways.