To identify potential signaling molecules involved in mediating insulin-induced biological responses, a yeast two-hybrid screen was performed with the cytoplasmic domain of the human insulin receptor (IR) as bait to trap high-affinity interacting proteins encoded by human liver or HeLa cDNA libraries. A SH2-domain-containing protein was identified that binds with high affinity in vitro to the autophosphorylated IR. The mRNA for this protein was found by Northern blot analyses to be highest in skeletal muscle and was also detected in fat by PCR. To study the role of this protein in insulin signaling, a full-length cDNA encoding this protein (called Grb-IR) was isolated and stably expressed in Chinese hamster ovary cells overexpressing the human IR. Insulin treatment of these cells resulted in the in situ formation of a complex of the IR and the 60-kDa Grb-IR. Although almost 75% of the Grb-IR protein was bound to the IR, it was only weakly tyrosine-phosphorylated. The formation of this complex appeared to inhibit the insulin-induced increase in tyrosine phosphorylation of two endogenous substrates, a 60-kDa GTPase-activating-protein-associated protein and, to a lesser extent, IR substrate 1. The subsequent association of this latter protein with phosphatidylinositol 3-kinase also appeared to be inhibited. These findings raise the possibility that Grb-IR is a SH2-domain-containing protein that directly complexes with the IR and serves to inhibit signaling or redirect the IR signaling pathway.