The insulin receptor (IR) tyrosine kinase can apparently directly phosphorylate and activate one or more serine kinases. The identities of such serine kinases and their modes of activation are still unclear. We have described a serine kinase (here designated insulin receptor serine (IRS) kinase) from rat liver membranes that co-purifies with IR on wheat germ agglutinin-agarose. The kinase was activated after phosphorylation of the membrane glycoproteins by casein kinase-1, casein kinase-2, or casein kinase-3 (Biochem Biophys Res Commun 171: 75-83,1990). In this study, IRS kinase was further characterized. The presence of vanadate or phosphotyrosine in reaction mixtures was required for activation to be observed. Phosphoserine and phosphothreonine are only about 25% as effective as phosphotyrosine, whereas sodium fluoride and molybdate were ineffective in supporting activation. Vanadate and phosphotyrosine support IRS kinase activation by apparently inhibiting phosphotyrosine protein phosphatases present among the membrane glycoproteins. IR beta-subunit, myelin basic protein, and microtubule-associated protein-2 are good substrates for IRS kinase. The kinase prefers Mn2+ (Ka = 1.3 mM) as a metal cofactor. Mg2+ (Ka = 3.3 mM) is only 30% as effective as Mn2+. The kinase activity is stimulated by basic polypeptides, with greater than 30-fold activation achieved with polylysine and protamine. Our results suggest that both serine/threonine and tyrosine phosphorylation are required for activation of IRS kinase. Serine phosphorylation is catalyzed by one of the casein kinases, whereas tyrosine phosphorylation is catalyzed by a membrane tyrosine kinase, possibly IR tyrosine kinase.