The crystal structure of the phosphorylated, activated form of the insulin receptor tyrosine kinase in complex with a peptide substrate and an ATP analog has been determined at 1.9 A resolution. The activation loop (A-loop) of the kinase undergoes a major conformational change upon autophosphorylation of Tyr1158, Tyr1162 and Tyr1163 within the loop, resulting in unrestricted access of ATP and protein substrates to the kinase active site. Phosphorylated Tyr1163 (pTyr1163) is the key phosphotyrosine in stabilizing the conformation of the tris-phosphorylated A-loop, whereas pTyr1158 is completely solvent-exposed, suggesting an availability for interaction with downstream signaling proteins. The YMXM-containing peptide substrate binds as a short anti-parallel beta-strand to the C-terminal end of the A-loop, with the methionine side chains occupying two hydrophobic pockets on the C-terminal lobe of the kinase. The structure thus reveals the molecular basis for insulin receptor activation via autophosphorylation, and provides insights into tyrosine kinase substrate specificity and the mechanism of phosphotransfer.