Insulin receptor substrate 1 (IRS-1), an intracellular substrate of the insulin receptor tyrosine kinase, also is heavily phosphorylated on serine and threonine residues, and several serine phosphorylation sites alter the function of IRS-1. Because of the large number of serine/threonine residues, position-by-position analysis of these potential phosphorylation sites by mutagenesis is difficult. To circumvent this, we have employed matrix-assisted laser desorption/ionization time-of-flight and HPLC-electrospray ionization tandem mass spectrometry techniques to scan for serine and threonine residues that are phosphorylated in full-length human IRS-1 ectopically expressed in cells using an adenoviral vector. This approach revealed 12 phosphorylation sites on serine or threonine residues, 10 of which were novel sites. Seven of these sites were in proline-directed motifs, whereas five were in arginine-directed sites. Sequence inspection suggested that phosphorylation of Ser1223 might alter the interaction of IRS-1 with the protein tyrosine phosphatase Src homology domain 2 (SH2)-containing phosphatase-2 (SHP-2). Mutation of Ser1223 to alanine to prevent phosphorylation resulted in increased association of SHP-2 with IRS-1, decreased insulin-stimulated tyrosine phosphorylation of IRS-1 in CHO/IR cells, and decreased insulin-stimulated association of the p85 regulatory subunit of phosphatidylinositol-3-kinase with IRS-1. This mutation had no effect on association of IRS-1 with the insulin receptor. Sequence analysis showed the Ser1223 region to be widely conserved evolutionarily. These data suggest that phosphorylation of Ser1223 dampens association of IRS-1 with SHP-2, thereby increasing net insulin-stimulated tyrosine phosphorylation.