IGF-1 and its receptor play a pivotal role in many cancers, and therefore, IGF-1R is an attractive target for the design of inhibitors. In this communication, we report on a number of lead compounds for inhibitors of the isolated IGF-1R kinase. The search for these compounds utilized two novel in vitro assays and was aided by the knowledge of the three-dimensional structure of the insulin receptor kinase domain, which is 84% homologous to the IGF-1R kinase domain. The most potent inhibitor found in these assays was tyrphostin AG 538, with an IC(50) = 400 nM. In computer modeling, AG 538 was placed in the kinase domain of the insulin receptor and was able to sit in place of tyrosines 1158 and 1162, which undergo autophosphorylation. Experimentally it is indeed found that AG 538 does not compete with ATP but competes with the IGF-1R substrate. We prepared I-OMe AG 538, which is more hydrophobic and less sensitive to oxidation than AG 538. Both AG 538 and I-OMe AG 538 inhibit IGR-1R autophosphorylation in intact cells in a dose-dependent manner but I-OMe-AG 538 is superior, probably because of its enhanced hydrophobic nature. Both compounds inhibit the activation of the downstream targets PKB and Erk2. These findings suggest that AG 538 and I-OMe-AG 538 can serve as a lead compound for the development of substrate competitive inhibitors of the IGF-1R. The possible advantage of substrate competitive inhibitors vis-à-vis ATP competitive inhibitors is discussed.