Grb10 has been proposed to inhibit or activate insulin signaling, depending on cellular context. We have investigated the mechanism by which full-length hGrb10gamma inhibits signaling through the insulin receptor substrate (IRS) proteins. Overexpression of hGrb10gamma in CHO/IR cells and in differentiated adipocytes significantly reduced insulin-stimulated tyrosine phosphorylation of IRS-1 and IRS-2. Inhibition occurred rapidly and was sustained for 60 min during insulin stimulation. In agreement with inhibited signaling through the IRS/PI 3-kinase pathway, we found hGrb10gamma to both delay and reduce phosphorylation of Akt at Thr(308) and Ser(473) in response to insulin stimulation. Decreased phosphorylation of IRS-1/2 may arise from impaired catalytic activity of the receptor, since hGrb10gamma directly associates with the IR kinase regulatory loop. However, yeast tri-hybrid studies indicated that full-length Grb10 blocks association between IRS proteins and IR, and that this requires the SH2 domain of Grb10. In cells, hGrb10gamma inhibited insulin-stimulated IRS-1 tyrosine phosphorylation in a dose-dependent manner, but did not affect IR catalytic activity toward Tyr(972) in the juxtamembrane region and Tyr(1158/1162/1163) in the regulatory domain. We conclude that binding of hGrb10gamma to IR decreases signaling through the IRS/PI 3-kinase/AKT pathway by physically blocking IRS access to IR.