The recently characterized receptor for interleukin (IL)-7 (IL-7R) includes a unique alpha chain as well as a common gamma chain shared with the receptors for IL-2 and IL-4. Engagement of the IL-7R activates the intracellular enzyme phosphatidylinositol (PtdIns) 3-kinase but the mechanism of PtdIns 3-kinase activation and the molecular basis of its interaction with IL-7R are not known. Here we show that IL-7 causes the 85-kDa regulatory subunit of PtdIns 3-kinase (p85), and PtdIns 3-kinase activity, to associate with the IL-7R. This interaction can be ascribed to ligand-induced phosphorylation of a single Tyr residue in the receptor's unique alpha chain. Herbimycin A, a specific protein tyrosine kinase inhibitor, suppresses not only tyrosine phosphorylation of the IL-7R but also its association with p85. A phosphopeptide corresponding to the sequence surrounding Tyr449 in the cytoplasmic tail of the IL-7R alpha chain, but not its non-phosphorylated analogue or phosphopeptides coincident with the sequences surrounding other alpha chain Tyr residues, efficiently competes out p85 binding. Replacement of Tyr449 with Phe results in a loss of p85 binding. Finally, soluble forms of the src homology 2 domains of p85, which bind directly to phosphotyrosyl peptides, specifically inhibit the association of p85 with the IL-7R. Thus, PtdIns 3-kinase recruitment occurs through a single, phosphotyrosine dependent recognition motif surrounding Tyr449 in the IL-7R alpha chain. This motif corresponds to a canonical sequence for p85 binding, Tyr(P)-X-X-Met. Since the closely related IL-2R and IL-4R also activate PtdIns 3-kinase but are devoid of such canonical motifs, our results suggest that the mechanism by which IL-7R recruits and activates PtdIns 3-kinase differs fundamentally from that used by the other receptors. PtdIns 3-kinase may, therefore, play a unique and important role in the biological response to IL-7.