Tumor necrosis factor alpha (TNFalpha) interferes with insulin signaling in adipose tissue and may promote insulin resistance. Insulin binding to the insulin receptor (IR) triggers its autophosphorylation, resulting in phosphorylation of Shc and the downstream activation of p42/p44 extracellular signal-regulated kinase 1/2 mitogen-activated protein kinase (ERK1/2), which mediates insulin-induced proliferation in vascular smooth muscle cells (VSMC). Since insulin resistance is a risk factor for vascular disease, we examined the effects of TNFalpha on mitogenic signaling by insulin. In rat aortic VSMC, insulin induced rapid phosphorylation of the IR and Shc and caused a 5.3-fold increase in activated, phosphorylated ERK1/2 at 10 min. Insulin induced a biphasic ERK1/2 activation with a transient peak at 10 min and a sustained late phase after 2 h. Preincubation (30-120 min) with TNFalpha had no effect on insulin-induced IR phosphorylation. In contrast, TNFalpha transiently suppressed insulin-induced ERK1/2 activation. Insulin-induced phosphorylation of Shc was inhibited by TNFalpha in a similar pattern. Since mitogenic signaling by insulin in VSMC requires ERK1/2 activation, we examined the effect of TNFalpha on insulin-induced proliferation. Insulin alone induced a 3.4-fold increase in DNA synthesis, which TNFalpha inhibited by 48%. TNFalpha alone was not mitogenic. Inhibition of ERK1/2 activation with PD98059 also inhibited insulin-stimulated DNA synthesis by 57%. TNFalpha did not inhibit platelet-derived growth factor-induced ERK1/2 activation or DNA synthesis in VSMC. Thus, TNFalpha selectively interferes with insulin-induced mitogenic signaling by inhibiting the phosphorylation of Shc and the downstream activation of ERK1/2.