Id proteins are known to play important roles in the proliferation and differentiation of many cell types. The type 1 insulin-like growth factor receptor (IGF-IR), activated by its ligand, induces the differentiation of 32D IGF-IR cells, a murine hematopoietic cell line, expressing a human IGF-IR. Expression in 32D IGF-IR cells of a dominant negative mutant of Stat3 (DNStat3) inhibits IGF-I-mediated differentiation. DNStat3 causes a dramatic increase in Id2 gene expression. This increase, however, is IGF-I dependent and is abrogated by a mutation at tyrosine 950 of the IGF-IR. These results indicate that in 32D cells, the IGF-IR regulates the expression of the Id2 gene and that this regulation is modulated by both positive and negative signals. Our results also suggest that in this model, Id2 proteins influence the differentiation program of cells but are not sufficient for the full stimulation of their proliferation program.