Insulin receptor substrate 1 (IRS-1) and src homology and collagen protein (SHC) are signaling proteins which are rapidly phosphorylated on tyrosines after insulin receptor (IR) activation. We have recently shown that both SHC and IRS-1 interact with the tyrosine-phosphorylated NPEY motif of the PR and insulin-like growth factor I receptor via non-SH2 domains (Gustafson, T. A., He, W., Craparo, A., Schaub, C. D., and O'Neill, T. J. (1995) Mel. Cell. Biol. 15, 2500-2508; O'Neill, T. J., Craparo, A., and Gustafson, T. A. (1994) Mel. Cell. Biol. 14, 6433-6442; Craparo, A., O'Neill, T. J., and Gustafson, T. A. (1995) J. Biol. Chem. 270, 15639-15643). In this study we characterize these interactions by examining the effects of 18 amino acid substitutions within and around the IR NPEY motif upon interaction with SHC and IRS 1. We confirm that Tyr-960 within the NPEY motif of the IR is essential for both IRS-1 and SHC interaction and that Asn 957 and Pro-958 are essential for IRS-1 interaction and important but not critical for SHC interaction. Additional mutations surrounding the NPEY motif revealed completely distinct patterns of interaction for SHC and IRS-1. Specifically, mutation of Leu-952 or Tyr-953 (at positions -7 and -8 from Tyr-960) markedly reduced IRS-1 interaction but had no effect upon SHC interaction. Likewise, mutation of Ala-963 (+3) reduced IRS-1 but not SHC interaction. Conversely, substitution of Leu-961 (+1) with either Ala or Arg reduced SHC interaction by 70 and 90%, respectively, yet had no effect upon interaction with IRS-1. Our data show that the sequences within and surrounding the NPEY contribute differentially to either SHC or IRS-1 recognition. Our findings suggest mechanisms by which the differential interaction of known receptors with IRS-1 and SHC may be mediated.