The interaction of endothelial P-selectin (CD62P) with neutrophil PSGL-1 (P-selectin glycoprotein ligand-1, CD162) mediates neutrophil rolling, which acts in concert with cytokines and chemoattractants for integrin-mediated firm adhesion of neutrophils to vascular endothelial cells. Numerous studies have established that this sequence of events is critical to the extravasation of neutrophils during an inflammatory response. We have recently shown that cross-linking of PSGL-1 with P-selectin acts cooperatively with extracellular stimuli, such as cytokines and chemoattractants released from and displayed on the activated endothelial lining of the vessel walls, for optimal activation of beta2-integrins, an increase in their apparent affinity/avidity for cognate ligands, which in turn supports firm adhesion and transendothelial migration. To identify cellular proteins which interact with human PSGL-1 and trigger this cascade of events, we used the cytoplasmic domain of human PSGL-1 as the bait for screening of human leukocyte yeast two-hybrid library. During this genetic screening, we identified Naf-1 (Nef-associated factor 1; also called ABIN, A20 binding inhibitor of NF-kB, or VAN, virion-associated nuclear shuttle protein) as a binding partner to the cytoplasmic domain of PSGL-1. The specific interaction of Naf1 with PSGL-1 was confirmed by GST-fusion protein pull-down and co-immunoprecipitation experiments. As YPPM at 552–555 of Naf1a amino acid sequence is a known binding motif for p85 subunit of phosphatidylinositol-3 kinase (PI3K; YXXM in which phosphorylated Y is required for p85 binding), we performed co-immunoprecipitation experiments to show that Naf1a actually acted as an adaptor protein for PSGL-1 and p85 subunit of PI3K. In addition, we found that P-selectin activated the enzyme activity of PI3K in human neutrophils and PI3K specific inhibitors, wortmannin and LY294002, inhibited alphaMbeta2 activation and clustering induced by P-selectin. Our data thus delineate a novel PSGL-1 signal transduction pathway essential for transactivation of beta2-integrins.