After insulin stimulation of cells, signaling complexes are formed, containing the insulin receptor (IR), insulin receptor substrate-1 (IRS-1), and phosphatidylinositol-3-kinase. To study the nature of these complexes, we employed purified IR, recombinant IRS-1, antibodies to IR and IRS-1, and fusion proteins containing the two SH2 domains of p85. In intact cells, insulin increased tyrosine phosphorylation of both the IR and IRS-1. Both of these proteins were immunoprecipitated with antibodies to p85. Also, fusion proteins containing the two SH2 domains of p85 directly precipitated both the IR and IRS-1. Next, these signaling complexes were reconstituted in vitro with purified IR, recombinant IRS-1, and the two SH2 domains of p85. In the presence of both SH2 domains of p85, the IR associated with IRS-1. Other data, both in intact cells and in vitro, demonstrated that N- and C-terminal SH2 domains of p85 had preferential binding affinities for the IR and IRS-1, respectively. Studies with an IR mutant truncated in the C terminus indicated that the C-terminal phosphotyrosines of the IR play a major role in interacting with the SH2 domains of p85. In conclusion, both in vivo and in vitro data support a role for p85 in directly linking the IR to IRS-1 via its SH2 domains. The formation of these complexes, therefore, may provide a mechanism for the translocation to the plasma membrane of phosphatidylinositol-3-kinase and other molecules that are involved in IR signaling.