Binding of interferon alpha (IFN alpha) to its receptor induces activation of the Tyk-2 and Jak-1 tyrosine kinases and tyrosine phosphorylation of multiple downstream signaling elements, including the Stat components of the interferon-stimulated gene factor 3 (ISGF-3). IFN alpha also induces tyrosine phosphorylation of IRS-1, the principle substrate of the insulin receptor. In this study we demonstrate that various Type I IFNs rapidly stimulate tyrosine phosphorylation of IRS-2. This is significant since IRS-2 is the major IRS protein found in hematopoietic cells. The IFN alpha-induced phosphorylated form of IRS-2 associates with the p85 regulatory subunit of the phosphatidylinositol 3'-kinase, suggesting that this kinase participates in an IFN alpha-signaling cascade downstream of IRS-2. We also provide evidence for an interaction of IRS-2 with Tyk-2, suggesting that Tyk-2 is the kinase that phosphorylates this protein during IFN alpha stimulation. A conserved region in the pleckstrin homology domain of IRS-2 may be required for the interaction of IRS-2 with Tyk-2, as shown by the selective binding of glutathione S-transferase (GST) fusion proteins containing the IRS-2-IH1PH or IRS-1-IH1PH domains to Tyk-2 but not other Janus kinases in vitro.