Mice made insulin receptor substrate 1 (IRS-1) deficient by targeted gene knockout exhibit growth retardation and abnormal glucose metabolism due to resistance to the actions of insulin-like growth factor 1 (IGF-1) and insulin (E. Araki et al., Nature 372:186-190, 1994; H. Tamemoto et al., Nature 372:182-186, 1994). Embryonic fibroblasts and 3T3 cell lines derived from IRS-1-deficient embryos exhibit no IGF-1-stimulated IRS-1 phosphorylation or IRS-1-associated phosphatidylinositol 3-kinase (PI 3-kinase) activity but exhibit normal phosphorylation of IRS-2 and Shc and normal IRS-2-associated PI 3-kinase activity. IRS-1 deficiency results in a 70 to 80% reduction in IGF-1-stimulated cell growth and parallel decreases in IGF-1-stimulated S-phase entry, PI 3-kinase activity, and induction of the immediate-early genes c-fos and egr-1 but unaltered activation of the mitogen-activated protein kinases ERK 1 and ERK 2. Expression of IRS-1 in IRS-1-deficient cells by retroviral gene transduction restores IGF-1-stimulated mitogenesis, PI 3-kinase activation, and c-fos and egr-1 induction in proportion to the level of reconstitution. Increasing the level of IRS-2 in these cells by using a retrovirus reconstitutes IGF-1 activation of PI 3-kinase and immediate-early gene expression to the same degree as expression of IRS-1; however, IRS-2 overexpression has only a minor effect on IGF-1 stimulation of cell cycle progression. These results indicate that IRS-1 is not necessary for activation of ERK 1 and ERK 2 and that activation of ERK 1 and ERK 2 is not sufficient for IGF-1-stimulated activation of c-fos and egr-1. These data also provide evidence that IRS-1 and IRS-2 are not functionally interchangeable signaling intermediates for stimulation of mitogenesis despite their highly conserved structure and many common functions such as activating PI 3-kinase and early gene expression.