Insulin acts on its target tissues by specific interaction with the cell surface insulin receptor (IR). The IR possesses an intrinsic tyrosine kinase (TK) activity which is stimulated by insulin binding. This TK activity is required for many aspects of insulin signalling. We had earlier reported that human plasma alpha 2-HS glycoprotein (alpha 2-HSG) inhibits insulin-stimulated mitogenesis at the level of IR-TK (Mol Endo 7: 1445-1455, 1993). In the present study, using recombinant alpha 2-HSG, which possesses 50-100 times the specific activity of plasma alpha 2-HSG, we have further investigated the molecular basis of this effect. We examined the insulin-stimulated Ras signalling pathway in Chinese Hamster Ovary cells overexpressing the human IR. alpha 2-HSG inhibits insulin-induced tyrosine phosphorylation of IRS-1 and the subsequent association of GRB2, as well as Sos, with IRS-1. This inhibition results in reduced guanine nucleotide exchange in p21ras. alpha 2-HSG also inhibits the stimulation of Raf phosphorylation, in response to insulin, leading to inhibition of MEK activity. In a parallel pathway, alpha 2-HSG also inhibits insulin-induced tyrosine phosphorylation of Shc. However, alpha 2-HSG does not affect any of the metabolic actions of insulin rested in these cells. These results suggest that, while insulin's mitogenic effects can be abolished by inhibition of insulin-induced IR-TK, propagation of signals for metabolic activities might utilize alternate of rescue mechanisms.