Reelin is a large secreted signaling protein that binds to two members of the low density lipoprotein receptor family, the apolipoprotein E receptor 2 and the very low density lipoprotein receptor, and regulates neuronal positioning during brain development. Reelin signaling requires activation of Src family kinases as well as tyrosine phosphorylation of the intracellular adaptor protein Disabled-1 (Dab1). This results in activation of phosphatidylinositol 3-kinase (PI3K), the serine/threonine kinase Akt, and the inhibition of glycogen synthase kinase 3beta, a protein that is implicated in the regulation of axonal transport. Here we demonstrate that PI3K activation by Reelin requires Src family kinase activity and depends on the Reelin-triggered interaction of Dab1 with the PI3K regulatory subunit p85alpha. Because the Dab1 phosphotyrosine binding domain can interact simultaneously with membrane lipids and with the intracellular domains of apolipoprotein E receptor 2 and very low density lipoprotein receptor, Dab1 is preferentially recruited to the neuronal plasma membrane, where it is phosphorylated. Efficient Dab1 phosphorylation and activation of the Reelin signaling cascade is impaired by cholesterol depletion of the plasma membrane. Using a neuronal migration assay, we also show that PI3K signaling is required for the formation of a normal cortical plate, a step that is dependent upon Reelin signaling.