Tumor necrosis factor (TNF) and interleukin 1 (IL1) activate a protein kinase, TIP kinase, which phosphorylates beta casein in vitro. We have now identified its main phosphorylation site on beta casein, Ser124 (Km approximately 28 mu M), and a minor phosphorylation site, Ser142 (Km approximately 0.7 mM). The sequence motif that determined the phosphorylation of Ser124 by the kinase was studied with synthetic peptides bearing deletions or substitutions of the neighboring residues. This allowed synthesis of improved substrates (Km approximately 6 mu M) and showed that efficient phosphorylation of Ser124 was favored by the presence of large hydrophobic residues at positions +1, +9, +11, and +13 (counted relative to the position of the phosphoacceptor amino acid) and of a cysteine at position -2. Peptides in which Ser124 was replaced by tyrosine were also phosphorylated by TIP kinase, showing it to have dual specificity. It is unable to phosphorylate the MAP kinases in vitro and is therefore not directly involved in their activation. Its biochemical characteristics indicate that TIP kinase is a novel dual specificity kinase, perhaps related to the mixed lineage kinases. It copurified with a phosphoprotein of about 95 kDa, which could correspond either to the autophosphorylated kinase or to an associated substrate.