Chronic ethanol exposure inhibits the capacity of the liver to regenerate. Insulin is a potent hepatotrophic factor, and tyrosyl phosphorylation (TP) of the intracellular insulin receptor substrate-1 (IRS-1) protein plays a crucial role in hepatocyte growth. The present investigation determined whether ethanol interferes with IRS-1-mediated signal transduction during liver regeneration induced by partial hepatectomy (PH) using the chronic ethanol-fed rat model. Tyrosyl phosphorylation of IRS-1 was strikingly increased and two peaks of TP were observed at 2 and 12 hr prior to the major wave of DNA synthesis in isocaloric pair-fed control animals; a blunted and delayed response was found in the ethanol-fed group. Furthermore, association of IRS-1 with phosphatidylinositol 3-kinase (PtdIns 3-kinase), a Src homology 2 (SH(2)) domain containing signal transduction molecule, was enhanced at 2 and 12 hr after PH in controls. In ethanol-fed rats, a single peak of association at 4 hr was observed. More important, PtdIns 3-kinase enzymatic activity was strikingly enhanced by the association with tyrosyl phosphorylated IRS-1 at 2 and 12 hr after PH, whereas in ethanol-fed animals this activity was greatly diminished and delayed to 6 and 36 hr, respectively. The biological consequence of this ethanol effect on TP of IRS-1 was a reduction and delay of the hepatic regenerative response after PH. These results indicate that one potential molecular mechanism whereby ethanol inhibits hepatocyte DNA synthesis is through its action on the IRS-1-mediated signal transduction pathway.