In the present study we describe a nonradioactive assay for measuring the intrinsic tyrosine kinase activity of the insulin receptor. This assay utilizes as an exogenous substrate a biotinylated peptide based on the sequence of the endogenous substrate insulin receptor substrate-1 (IRS-1). To separate the tyrosine phosphorylated peptide from the nonphosphorylated peptide, immobilized recombinantly produced SH2 domain of the p85 subunit of the phosphatidylinositol 3-kinase is utilized to bind the tyrosine-phosphorylated peptide. The amount of bound peptide is then detected by the use of peroxidase-conjugated streptavidin and a colorimetric assay. This assay has been used to measure the tyrosine kinase activity of receptor which was immunocaptured from lysates of various cells overexpressing the human insulin receptor as well as the endogenous insulin receptors in the parental cells. In this in vitro assay, no decrease in tyrosine kinase activity was observed in receptors from cells with activated overexpressed protein kinase C alpha or after high glucose treatment although a decrease in in situ phosphorylation of IRS-1 was observed with the activation of protein kinase C alpha. These results indicate that this assay may be a useful new method for monitoring the enzymatic activity of the insulin receptor kinase as well as other tyrosine kinases.