Insulin receptor substrates (IRSs) are tyrosine-phosphorylated following stimulation with insulin, insulin-like growth factors (IGFs), and interleukins. A key question is whether different IRSs play different roles to mediate insulin's metabolic and growth-promoting effects. In a novel system of insulin receptor-deficient hepatocytes, insulin fails to (i) stimulate glucose phosphorylation, (ii) enhance glycogen synthesis, (iii) suppress glucose production, and (iv) promote mitogenesis. However, insulin's ability to induce IRS-1 and gab-1 phosphorylation and binding to phosphatidylinositol (PI) 3-kinase is unaffected, by virtue of the compensatory actions of IGF-1 receptors. In contrast, phosphorylation of IRS-2 and generation of IRS-2/PI 3-kinase complexes are markedly reduced. Thus, absence of insulin receptors selectively reduces IRS-2, but not IRS-1 phosphorylation, and the impairment of IRS-2 activation is associated with lack of insulin effects. To address whether phosphorylation of additional IRSs is also affected, we analyzed phosphotyrosine-containing proteins in PI 3-kinase immunoprecipitates from insulin-treated cells. However, these experiments indicate that IRS-1 and IRS-2 are the main PI 3-kinase-bound proteins in hepatocytes. These data identify IRS-2 as the main effector of both the metabolic and growth-promoting actions of insulin through PI 3-kinase in hepatocytes, and IRS-1 as the main substrate mediating the mitogenic actions of IGF-1 receptors.