Raf Kinase Inhibitory Protein (RKIP, also known as PEBP), is a modulator of the Raf/MAP kinase signaling cascade and a suppressor of metastatic cancer. Here we show that RKIP inhibits MAP kinase by regulating Raf-1 activation; specifically, RKIP acts subsequent to Raf-1 membrane recruitment, prevents association of Raf-1 and Pak, and blocks phosphorylation of the Raf-1 kinase domain by Pak and Src family kinases. Mutation of the Pak and Src phosphorylation sites on Raf-1 to aspartate, a phosphate mimic, prevents RKIP association with or inhibition of Raf-1 signaling. Interestingly, although RKIP can interact with B-Raf, RKIP depletion has no effect on activation of B-Raf. Since c-Raf-1 and B-Raf are both required for maximal MAP kinase stimulation by EGF in neuronal and epithelial cell lines, we determined whether RKIP significantly affects MAP kinase signaling. In fact, RKIP depletion increases not only the amplitude but also the sensitivity of MAP kinase and DNA synthesis to EGF stimulation by up to an order of magnitude. These results indicate that selective modulation of c-Raf-1 but not B-Raf activation by RKIP can limit the dynamic range of the MAP kinase signaling response to growth factors and may play a critical role in growth and development.