An important aspect of the regulation of gene expression is the modulation of translation rates in response to growth factors, hormones and mitogens. Most of this control is at the level of translation initiation. Recent studies have implicated the MAP kinase pathway in the regulation of translation by insulin and growth factors. MAP kinase phosphorylates a repressor of translation initiation [4E-binding protein (BP) 1] that binds to the mRNA 5' cap binding protein eukaryotic initiation factor (eIF)-4E and inhibits cap-dependent translation. Phosphorylation of the repressor decreases its affinity for eIF-4E, and thus relieves translational inhibition. eIF-4E forms a complex with two other polypeptides, eIF-4A and p220, that promote 40S ribosome binding to mRNA. Here, we have studied the mechanism by which 4E-BP1 inhibits translation. We show that 4E-BP1 inhibits 48S pre-initiation complex formation. Furthermore, we demonstrate that 4E-BP1 competes with p220 for binding to eIF-4E. Mutants of 4E-BP1 that are deficient in their binding to eIF-4E do not inhibit the interaction between p220 and eIF-4E, and do not repress translation. Thus, translational control by growth factors, insulin and mitogens is affected by changes in the relative affinities of 4E-BP1 and p220 for eIF-4E.