Src homology (SH) domains of phospholipase C-$gamma1$ (PLC-$gamma1$) impair NGF-mediated PC12 cells differentiation. However, whether the enzymatic activity is also implicated in this process remains elusive. Here, we report that the enzymatic activity of phospholipase C-$gamma1$ (PLC-$gamma1$) is at least partially involved to the blockage of neuronal differentiation via an abrogation of MAPK activation, as well as sustained Akt activation. By contrast, Overexpression of WT-PLC-$gamma1$ exhibited sustained NGF-induced MAPK activation, and triggered transient Akt activation resulting in profound inhibition of neurite outgrowth. However, lipase-inactive mutant (LIM) PLC-$gamma1$ cells fail to suppress neurite outgrowth, although it contains intact SH domains, specifically enhancing the expression of cyclin D1 and p21 proteins, which regulate the function of retinoblastoma Rb protein. These observations show that the lipase inactive mutant of PLC-$gamma1$ does not alter NGF-induced neuronal differentiation via enzymatic inability and the modulation of cell cycle regulatory proteins independent on SH3 domain.