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 IR 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) Mol. Cell. Biol. 15, 2500-2508; O'Neill, T. J., Craparo, A., and Gustafson, T. A. (1994) Mol. 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.