We compared the interaction between the insulin receptor (IR) and the IR substrate (IRS) proteins IRS-1 and IRS-2) using the yeast two-hybrid system. Both IRS proteins interact specifically with the cytoplasmic portion of the IR and the related insulin-like growth factor-I receptor, and these interactions require receptor tyrosine kinase activity. Alignment of IRS-1 and IRS-2 revealed two conserved domains at the NH2 terminus, called IH1PH and IH2PTB, which resemble a pleckstrin homology (PH) domain and a phosphotyrosine binding (PTB) domain, respectively. The IH2PTB binds to the phosphorylated NPXY motif (Tyr-960) in the activated insulin receptor, providing a specific mechanism for the interaction between the receptor and IRS-1. Although the IH2PTB of IRS-2 also interacts with the NPEY motif of the insulin receptor, it is not essential for the interaction between the insulin receptor and IRS-2 in the yeast two-hybrid system. IRS-2 contains another interaction domain between residues 591 and 786, which is absent in IRS-1. This IRS-2-specific domain is independent of the IH2PTB and does not require the NPEY motif; however, it requires a functional insulin receptor kinase and the presence of three tyrosine phosphorylation sites in the regulatory loop (Tyr-1146, Tyr-1150, and Tyr-1151). Importantly, this novel domain mediates the association between IRS-2 and insulin receptor lacking the NPXY motif and may provide a mechanism by which the stoichiometry of regulatory loop autophosphorylation enhances IRS-2 phosphorylation.