Crystal structures of the insulin receptor substrate-1 (IRS-1) phosphotyrosine-binding (PTB) domain, alone and complexed with the juxtamembrane region of the insulin receptor, show how this domain recognizes phosphorylated "NPXY" sequence motifs. The domain is a 7-stranded β sandwich capped by a C-terminal helix. The insulin receptor phosphopeptide fills an L-shaped cleft on the domain. The N-terminal residues of the bound peptide form an additional strand in the β sandwich, stabilized by contacts with the C-terminal helix. These interactions explain why IRS-1 binds to the insulin receptor but not to NPXpY motifs in growth factor receptors. The PTB domains of IRS-1 and Shc share a common fold with pleckstrin homology domains. Overall, ligand binding by IRS-1 and Shc PTB domains is similar, but residues critical for phosphotyrosine recognition are not conserved.