The receptor for the myeloid cell growth factor colony stimulating factor 1 (CSF-1) is a protein tyrosine kinase that is closely related to the PDGF receptor. Ligand binding results in kinase activation and autophosphorylation. Three autophosphorylation sites, Tyr697, Tyr706 and Tyr721, have been mapped to the kinase insert domain. Deletion of the entire kinase insert domain completely abrogates signal transduction by the CSF-1 receptor expressed in Rat-2 fibroblasts. To investigate the function of individual phosphorylation sites present in the CSF-1 receptor kinase insert domain, a number of phosphorylation site mutants were expressed in Rat-2 fibroblasts. Mutation of either Tyr697 or Tyr721 compromised signal transduction by the CSF-1 receptor. A mutant receptor, in which both Tyr697 and Tyr721 were replaced by phenylalanine, has lost all ability to induce changes in morphology or to increase cell growth rate in response to CSF-1. Tyr721 has been identified recently as the binding site for PI 3-kinase. Here we report that GRB2 associates with the CSF-1 receptor upon ligand binding. The phosphorylation on tyrosine of SHC and several other GRB2-associated proteins increased upon stimulation with CSF-1. Tyr697 was identified as a binding site for GRB2. We suggest that PI 3-kinase, GRB2 and some of the GRB2-associated proteins could play an important role in signal transduction by the CSF-1 receptor.