3S-peptide-I is a synthetic tris-sulfotyrosyl dodecapeptide corresponding to the major site of insulin receptor autophosphorylation that potently inhibits dephosphorylation of the insulin receptor in a cell-free system and in digitonin-permeabilized Chinese hamster ovary (CHO) cells overexpressing the human insulin receptors (CHO/HIRc cells) (Liotta, A. S., Kole, H. K., Fales, H. M., Roth, J., and Bernier, M. (1994) J. Biol. Chem. 269, 22996-23001), In the present study, we found that 3S-peptide-I was not capable of inhibiting dephosphorylation of the epidermal growth factor (EGF) receptors in digitonin-permeabilized CHO cells that overexpress human EGF receptors (CHO/EGF-R cells), Moreover, the addition of a N-stearyl derivative of 3S-peptide-I to intact CHO/HIRc cells caused a concentration-dependent increase in insulin-stimulated phosphorylation of the insulin receptor, with a maximum effect (similar to 2.7-fold) at 50 mu M. In contrast, ligand-stimulated EGF receptor phosphorylation in CHO/EGF-R cells was not affected by the presence of stearyl 3S-peptide-I, Furthermore, treatment of CHO/HIRc cells with this N-stearyl peptide led to a significant enhancement of the insulin induced association of phosphatidylinositol (PI) 3-kinase activity with insulin receptor substrate 1 and the activation of mitogen-activated protein kinase, However, stearyl 3S-peptide-I had no effect on the EGF stimulated activation of PI-3-kinase and mitogen-activated protein kinase in CHO/EGF-R cells, These data indicate that this tris-sulfotyrosyl dodecapeptide selectively enhances insulin signal transduction by specifically inhibiting dephosphorylation of the insulin receptor in intact cells.