pp120 (Ceacam 1) undergoes ligand-stimulated phosphorylation by the insulin receptor, but not by the insulin-like growth factor 1 receptor (IGF-1R). This differential phosphorylation is regulated by the C terminus of the -subunit of the insulin receptor, the least conserved domain of the two receptors. In the present studies, deletion and site-directed mutagenesis in stably transfected hepatocytes derived from insulin receptor knockout mice (IR ؊/؊ ) revealed that Tyr 1316 , which is replaced by the nonphosphorylatable phenylalanine in IGF-1R, regulated the differential phosphorylation of pp120 by the insulin receptor. Similarly, the nonconserved Tyr 1316 residue also regulated the differential effect of pp120 on IGF-1 and insulin mitogenesis, with pp120 downregulating the growth-promoting action of insulin, but not that of IGF-1. Thus, it appears that pp120 phosphorylation by the insulin receptor is required and sufficient to mediate its downregulatory effect on the mitogenic action of insulin. Furthermore, the current studies revealed that the C terminus of the -subunit of the insulin receptor contains elements that suppress the mitogenic action of insulin. Because IR ؊/؊ hepatocytes are derived from liver, an insulin-targeted tissue, our observations have finally resolved the controversy about the role of the least-conserved domain of insulin and IGF-1Rs in mediating the difference in the mitogenic action of their ligands, with IGF-1 being more mitogenic than insulin.The insulin receptor is essential to mediate insulin action on target cells (1,27). It is a cell surface glycoprotein of a heterotetrameric structure that consists of two ␣-and two -subunits. The extracellular ␣-subunits contain the insulin binding domains, and the transmembrane -subunits contain the tyrosine kinase and the phosphorylation sites. Insulin binding to its receptor activates the tyrosine kinase to phosphorylate the receptor and other endogenous substrates, such as pp120 (Ceacam 1) (5a, 44), insulin receptor substrate proteins (IRS-1, -2, -3, and -4), Shc, and others (reviewed in references 65 and 66). Phosphorylation of different substrates is required to mediate the diverse effects of hormones on metabolism and growth (3,60,68).Insulin and insulin-like growth factor 1 (IGF-1) receptors are structurally related, and all conserved tyrosine residues that are phosphorylated in the insulin receptor in response to insulin are also phosphorylated in the IGF-1 receptor in response to 17,23,48,71). Moreover, these receptors share many substrates, such as Shc and members of the IRS family, phosphorylation of which is regulated by the conserved Tyr 960 in the juxtamembrane domain of the insulin receptor (18, 22, 67) and its corresponding residue in the IGF-1 receptor (8). Phosphorylated IRS-1 engages, in turn, in the formation of signaling complexes via phosphotyrosine-containing binding motifs with Src homology 2 (SH2) found in molecules like growth factor receptor binding protein (GRB2) (32, 56), Syp (SH PTP2) phosphotyrosine phosphatase...