SOCS-1 was originally identified as an inhibitor of interleukin-6 signal transduction and is a member of a family of proteins (SOCS-1 to SOCS-7 and CIS) that contain an SH2 domain and a conserved carboxyl-terminal SOCS box motif. Mutation studies have established that critical contributions from both the amino-terminal and SH2 domains are essential for SOCS-1 and SOCS-3 to inhibit cytokine signaling. Inhibition of cytokine-dependent activation of STAT3 occurred in cells expressing either SOCS-1 or SOCS-3, but unlike SOCS-1, SOCS-3 did not directly interact with or inhibit the activity of JAK kinases. Although the conserved SOCS box motif appeared to be dispensable for SOCS-1 and SOCS-3 action when overexpressed, this domain interacts with elongin proteins and may be important in regulating protein turnover. In gene knockout studies, SOCS-1(-/-) mice were born but failed to thrive and died within 3 weeks of age with fatty degeneration of the liver and hemopoietic infiltration of several organs. The thymus in SOCS-1(-/-) mice was small, the animals were lymphopenic, and deficiencies in B lymphocytes were evident within hemopoietic organs. We propose that the absence of SOCS-1 in these mice prevents lymphocytes and liver cells from appropriately controlling signals from cytokines with cytotoxic side effects.