Insulin stimulation results in a considerable spectrum of cellular responses, only part of which have been firmly correlated with the activation of established insulin receptor (IR) targets such as IRS-1, IRS-2, and Shc. Many responses may be transduced by alternative direct IR targets, some of which may still be unknown, may act in parallel to but independently of IRS-1, IRS-2, and Shc, and may be members of the growing family of SH2 domain-containing signaling adaptors. An SH2 domain-coding region of a protein termed PSM was cloned based on its interaction with an activated IR cytoplasmic fragment in a yeast two-hybrid screen. When used as a hybridization probe this region led to the isolation of a protein-coding cDNA which is expressed with a wide tissue distribution and exists in several variant forms. A pleckstrin homology domain and three Pro-rich regions including a putative SH3 domain binding site were identified in addition to the SH2 domain in the deduced 756 amino acid sequence. They imply a role of PSM in tyrosine kinase and phosphatase-mediated signaling pathways. A similar sequence termed SH2-B had been reported in an earlier study, which may represent the rat homolog of PSM. A role of PSM specifically in insulin action is suggested by the interaction of its SH2 domain with an activated but not with an inactive catalytic fragment of the IR in the yeast two-hybrid system in vivo, by the insulin-dependent association of a glutathione S-transferase (GST) PSM SH2 domain fusion protein with purified IR in vitro, and by the insulin-dependent association of GST PSM SH2 with the IR in cell extracts. In contrast, PSM was not found to associate with the established IR substrate IRS-1 under any conditions and appears to act independently of IRS-1. All of our findings are compatible with a putative role of PSM in insulin action.