The glucose effect on cell growth has been investigated in the JAr human choriocarcinoma cells. When JAr cells were cultured in the presence of 6 mm glucose (LG), proliferation and thymidine incorporation were induced by serum, epidermal growth factor, and insulin-like growth factor 1 but not by insulin. In contrast, at 25 mm glucose (HG), proliferation and thymidine incorporation were stimulated by insulin, serum, epidermal growth factor, and insulin-like growth factor 1 to a comparable extent, whereas basal levels were 25% lower than those in LG. HG culturing also enhanced insulin-stimulated insulin receptor and insulin receptor substrate 1 (IRS1) tyrosine phosphorylations while decreasing basal phosphorylations. These actions of glucose were accompanied by an increase in cellular tyrosine phosphatase activity. The activity of SHP-2 in HG-treated JAr cells was 400% of that measured in LG-treated cells. SHP-2 co-precipitation with IRS1 was also increased in HG-treated cells. SHP-2 was mainly cytosolic in LG-treated cells. However, HG culturing largely redistributed SHP-2 to the internal membrane compartment, where tyrosine-phosphorylated IRS1 predominantly localizes. Further exposure to insulin rescued SHP-2 cytosolic localization, thereby preventing its interaction with IRS1. Antisense inhibition of SHP-2 reverted the effect of HG on basal and insulin-stimulated insulin receptor and IRS1 phosphorylation as well as that on thymidine incorporation. Thus, in JAr cells, glucose modulates insulin mitogenic action by modulating SHP-2 activity and intracellular localization.