In the accompanying paper (Emkey, R., and Kahn, C, R. (1997) J. Biol, Chem. 272, 31172-31181), we demonstrated that phorbol 12-myristate 13-acetate (PMA) treatment of Fao cells induces tyrosine phosphorylation of several proteins including ErbB2 and ErbB3, In the present study we show that sphingomyelinase also results in the enhanced tyrosine phosphorylation of ErbB2 and ErbB3 in these cells. In contrast to activation by PMA, the sphingomyelinase-induced phosphorylation of these proteins is independent of protein kinase C. However, both agents stimulate tyrosine phosphorylation of the kinase Pyk2 suggesting that it may be involved in the PMA and sphingomyelinase activation of these ErbB proto-oncogenes. Insulin plays a negative regulatory role in the ligand and non-ligand-induced phosphorylation of the ErbB proto-oncogenes via two mechanisms. Prolonged insulin treatment resulted in decreased expression of both ErbB2 and ErbB3. Insulin also appears to negatively regulate the protein tyrosine kinase responsible for phosphorylating ErbB2 in PMA-stimulated cells. The former effect of insulin was relieved by treatment with inhibitors of phosphatidylinositol 3-kinase. The similarities in PMA and sphingomyelinase-induced effects and the negative regulatory role of insulin suggest a mechanism by which multiple ligands can synergize with or protect against the tumorigenic effects of phorbol esters.