Insulin binding activates the insulin receptor tyrosine kinase leading to tyrosine phosphorylation of endogenous substrates such as insulin receptor substrates (IRSs) [1±4], Gab1 [5], and Shc [6]. Subsequent to tyrosine phosphorylation, these proteins bind various Src homology (SH) 2 domain-containing proteins which mediate various biological processes. Recently, four members of the IRS family have been cloned [1± 4, 7]. These molecules have a similar structure and contain in the following order from the N terminus: a pleckstrin homology (PH) domain which is considered to be involved in the interaction with phospholipids, a phosphotyrosine binding (PTB) domain which directly binds to the tyrosine-phosphorylated NPXY (NPXpY) motif containing Tyr 960 in the juxtamembrane region of the insulin receptor, and a C-ter- Abstract Aims/hypothesis. In primary adipocytes, although IRS-1 and IRS-3 are expressed in comparable amounts, these proteins manifest distinct distribution and significance in insulin signalling. We investigated the molecular basis of the difference between these two proteins. Methods. In Cos-1 cells transiently expressing rat IRS-1, IRS-3, or chimeric proteins of these two proteins we examined the tyrosine phosphorylation via the wild-type or mutant insulin receptors and evaluated their targeting to the plasma membrane by immunostaining the membrane ghost. Results. In contrast to IRS-1, IRS-3 was tyrosine-phosphorylated by the insulin receptor altering Tyr 960 to Phe (Y960F), which disrupts the binding site of the PTB domain of IRSs, to an extent comparable to the wild-type receptor. The tyrosine phosphorylation of IRS-3 with the PH domain replacement via the Y960F insulin receptor markedly decreased, whereas that of IRS-3 with the PTB domain alteration was mildly impaired. Insulin-stimulated translocation of IRS-1 to the plasma membrane, as well as that of IRS-3 with the PH domain replacement, was wortmannin-sensitive, although that of IRS-3 was insulinindependent and wortmannin-resistant. Conclusions/interpretation. The affinity of the PH domain for the phospholipids in the plasma membrane seems to influence the receptor-substrate interaction required for IRS tyrosine phosphorylation, indicating that the PH domain and the PTB domain of IRSs cooperatively function in insulin-stimulated tyrosine phosphorylation of these proteins. [Diabetologia (2001) Corresponding author: Dr. T. Kadowaki, The Department of Metabolic Disease, Graduate School of Medicine, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-8655, Japan. E-mail: kadowaki-3im@h.u_tokyo.ac.jp Abbreviations: IRS, insulin receptor substrate; SH, src homology; PH, pleckstrin homology; PTB, phosphotyrosine binding; NPXpY, tyrosine-phosphorylated NPXY; Y960F insulin receptor, the insulin receptor (Ullrich-type) in which the juxtamembrane Tyr 960 was altered to Phe; aPY, an antibody specific for phosphotyrosine; aHA, antibodies against haemagglutinin; aIRb, antibodies against the b subunit of human insulin receptor; FITC, fluorescein isoth...