pp120, a substrate of the insulin receptor tyrosine kinase, is a plasma membrane glycoprotein that is expressed in the hepatocyte as two spliced isoforms differing by the presence (full-length) or absence (truncated) of most of the intracellular domain including all phosphorylation sites. Co-expression of full-length pp120, but not its phosphorylation-defective isoforms, increased receptor-mediated insulin endocytosis and degradation in NIH 3T3 fibroblasts. We, herein, examined whether internalization of pp120 is required to mediate its effect on insulin endocytosis. The amount of fulllength pp120 expressed at the cell surface membrane, as measured by biotin labeling, markedly decreased in response to insulin only when insulin receptors were coexpressed. In contrast, when phosphorylation-defective pp120 mutants were co-expressed, the amount of pp120 expressed at the cell surface did not decrease in response to insulin. Indirect immunofluorescence analysis revealed that upon insulin treatment of cells co-expressing insulin receptors, full-length, but not truncated, pp120 co-localized with ␣-adaptin in the adaptor protein complex that anchors endocytosed proteins to clathrincoated pits. This suggests that full-length pp120 is part of a complex of proteins required for receptor-mediated insulin endocytosis and that formation of this complex is regulated by insulin-induced pp120 phosphorylation by the receptor tyrosine kinase. In vitro GST binding assays and co-immunoprecipitation experiments in intact cells further revealed that pp120 did not bind directly to the insulin receptor and that its association with the receptor may be mediated by other cellular proteins.Insulin binding to the extracellular ␣-subunits of its receptor triggers activation of the tyrosine kinase in the intracellular domain of the -subunits. Activation of the tyrosine kinase causes phosphorylation of the receptor and of endogenous substrates, including pp120, a plasma membrane glycoprotein of M r ϳ120,000 that is expressed in the liver as two spliced variants differing by the inclusion (full-length) or exclusion (truncated) of a 61 amino acid (aa) 1 segment in the C terminus of its cytoplasmic domain (1). The truncated isoform lacks all phosphorylation sites. Site-directed mutagenesis studies in NIH 3T3 mouse skin fibroblasts revealed that full-length pp120 is constitutively phosphorylated by cAMP-dependent serine kinase on Ser 503 and that this phosphorylation is required for its phosphorylation on Tyr 488 residue by the insulin receptor tyrosine kinase (2). Tyr 513 , the other tyrosine residue in the cytoplasmic domain of pp120, is not involved in insulinmediated pp120 phosphorylation (2).Binding of insulin to its receptor triggers the entry of the insulin-receptor complex into clathrin-coated pits, which pinch off the surface membrane to form clathrin-coated vesicles (3). The clathrin coat is formed upon receptor activation by the sequestration of the cytoplasmic adaptor proteins 2 (AP2) to the inner surface of the membrane where they bin...