Prohibitin (PHB or PHB1) is an evolutionarily conserved ubiquitously expressed multifunctional protein and is present in various cellular compartments. Phosphorylation of PHB has been suggested as one of the potential mechanisms in the regulation of its various functions however exact sites of phosphorylation remain to be determined. To better understand the functional relevance of phosphorylation of PHB, we have explored the potential sites of phosphorylation using combination of approaches including phosphoamino specific immunoblotting, proteolysis, two-dimensional gel electrophoresis, phosphoamino acid analysis and site-directed mutagenesis techniques and report that tyrosine 114 (Tyr 114) in PHB is phosphorylated in response to insulin stimulation. In addition, using active insulin receptor (IR) and synthetic biotinylated PHB peptide (PHB(107-121)) we have shown that IR also phosphorylates Tyr 114 in an in vitro kinase assay. Phosphorylation of PHB at Tyr 114 was confirmed by immunoblotting using anti-phosphoTyr 114 specific antibody. Furthermore, we demonstrate that SH2 domain containing tyrosine phosphatase-1 (Shp1) co-immunoprecipitate with PHB antiserum after insulin induced phosphorylation of PHB. Biotinylated-PHB(107-121) peptide phosphorylated at Tyr 114 was also able to pull down Shp1 in pull down assays. Non-phosphorylated PHB(107-121) peptide, corresponding PHB2(121-135) peptide and Tyr114Phe mutant-PHB fail to pull down Shp1. In summary, we have identified Tyr 114 in PHB as an important site of phosphorylation and phosphorylation at this residue creates a binding site for Shp1 both in vivo and in vitro.