Neurotrophins, such as nerve growth factor and brain-derived neurotrophic factor, activate Trk receptor tyrosine kinases through receptor dimerization at the cell surface followed by autophosphorylation and recruitment of intracellular signaling molecules. The intracellular pathways used by neurotrophins share many common protein substrates that are used by other receptor tyrosine kinases (RTK), such as Shc, Grb2, FRS2, and phospholipase C-gamma. Here we describe a novel RTK mechanism that involves a 220-kilodalton membrane tetraspanning protein, ARMS/Kidins220, which is rapidly tyrosine phosphorylated in primary neurons after neurotrophin treatment. ARMS/Kidins220 undergoes multiple tyrosine phosphorylation events and also serine phosphorylation by protein kinase D. We have identified a single tyrosine (Tyr(1096)) phosphorylation event in ARMS/Kidins220 that plays a critical role in neurotrophin signaling. A reassembled complex of ARMS/Kidins220 and CrkL, an upstream component of the C3G-Rap1-MAP kinase cascade, is SH3-dependent. However, Tyr(1096) phosphorylation enables ARMS/Kidins220 to recruit CrkL through its SH2 domain, thereby freeing the CrkL SH3 domain to engage C3G for MAP kinase activation in a neurotrophin dependent manner. Accordingly, mutation of Tyr(1096) abolished CrkL interaction and sustained MAPK kinase activity, a response that is not normally observed in other RTKs. Therefore, Trk receptor signaling involves an inducible switch mechanism through an unconventional substrate that distinguishes neurotrophin action from other growth factor receptors.