G-protein-linked receptors, such as the beta2-adrenergic receptor, are substrates for growth factor receptors with intrinsic tyrosine kinase activity (Karoor, V., Baltensperger, K., Paul, H., Czech, M. P., and Malbon C. C. (1995) J. Biol. Chem. 270, 25305-25308). In the present work, the counter-regulatory action of insulin on catecholamine action is shown to stimulate enhanced sequestration of beta2-adrenergic receptors in either DDT1MF-2 smooth muscle cells or Chinese hamster ovary cells stably expressing beta2-adrenergic receptors. Both insulin and insulin-like growth factor-1 stimulate internalization of beta-adrenergic receptors, contributing to the counter-regulatory effects of these growth factors on catecholamine action. In combination with beta-adrenergic agonists, insulin stimulates internalization of 50-60% of the complement of beta-adrenergic receptors. Insulin administration in vitro and in vivo stimulates phosphorylation of Tyr-350 of the beta-adrenergic receptor, creating an Src homology 2 domain available for binding of the adaptor molecule Grb2. The association of Grb2 with beta-adrenergic receptors was established using antibodies to Grb2 as well as a Grb2-glutathione S-transferase fusion protein. Insulin treatment of cells provokes binding of Grb2 to beta2-adrenergic receptors. Insulin also stimulates association of phosphatidylinositol 3-kinase and dynamin, via the Src homology 3 domain of Grb2. Both these interactions as well as internalization of the beta-adrenergic receptor are shown to be enhanced by insulin, beta-agonist, or both. The Tyr-350 --> Phe mutant form of the beta2-adrenergic receptor, lacking the site for tyrosine phosphorylation, fails to bind Grb2 in response to insulin, fails to display internalization of beta2-adrenergic receptor in response to insulin, and is no longer subject to the counter-regulatory effects of insulin on cyclic AMP accumulation. These data are the first to demonstrate the ability of a growth factor insulin to counter-regulate G-protein-linked receptor, the beta-adrenergic receptor, via a new mechanism, i.e. internalization.