We have investigated the early in vivo signaling events triggered by serum that lead to activation of the c-fos proto-oncogene in HeLa cells. Both RAF-1 and MEK kinase activities are fully induced within 3 min of serum treatment and quickly decrease thereafter, slightly preceding the activation and inactivation of p42MAPK/ERK2. ERK2 activity correlates tightly with a transient phosphatase-sensitive modification of ternary complex factor (TCF), manifested by the slower electrophoretic mobility of TCF-containing protein-DNA complexes. These induced complexes in turn correlate with the activity of the c-fos, egr-1, and junB promoters. Phorbol ester treatment induces the same events but with slower and prolonged kinetics. Inhibition of serine/threonine phosphatase activities by okadaic acid treatment reverses the repression of the c-fos promoter either after induction or without induction. This corresponds to the presence of the induced complexes and of ERK2 activity, as well as to the activation of a number of other kinases. Inhibition of tyrosine phosphatase activities by sodium vanadate treatment delays but does not block ERK2 inactivation, TCF dephosphorylation, and c-fos repression. The tight linkage in vivo between the activity of MAP kinase, TCF phosphorylation, and immediate-early gene promoter activity is consistent with the notion that a stable ternary complex over the serum response element is a direct target for the MAP kinase signaling cascade. Furthermore, serine/threonine phosphatases are implicated in regulating the kinase cascade, as well as the state of TCF modification and c-fos promoter activity, in vivo.