The regulatory (p85 alpha) and catalytic (p110 alpha) subunits of the mammalian phosphatidylinositol 3-kinase have been expressed in insect cells using the baculovirus sytem. The free catalytic subunit p110 alpha and the coexpressed heterodimeric complex of p85 alpha and p110 alpha were purified and their enzymological properties compared. While many kinetic parameters were similar, the coexpressed complex was found to have a 20-fold higher Km for ATP in comparison with the free catalytic subunit p110 alpha using phosphatidylinositol 4,5-bisphosphate as a substrate; no significant difference was detectable when phosphatidylinositol was used. Reconstitution of the p110 alpha.p85 alpha complex in vitro showed that it had the properties of the free p110 alpha and not the p110 alpha.p85 alpha in vivo complex. Therefore, a post-translational modification dependent upon the presence of the regulatory subunit p85 alpha rather than the physical subunit interaction itself is responsible for the observed properties of the lipid kinase activity of the p110 alpha.p85 alpha complex. Phosphatase treatment of the purified lipid kinase complex reduced the high Km for ATP, suggesting that a phosphorylation of the heterodimeric complex (p85 alpha.p110 alpha) caused this effect. This mode of regulation is discussed in the context of lipid kinase activation in vivo.