Tumor necrosis factor alpha (TNFalpha) inhibits insulin action, in part, through serine phosphorylation of IRS proteins; however, the phosphorylation sites that mediate the inhibition are unknown. TNFalpha promotes multipotential signal transduction cascades, including the activation of the Jun NH(2)-terminal kinase (JNK). Endogenous JNK associates with IRS-1 in Chinese hamster ovary cells. Anisomycin, a strong activator of JNK in these cells, stimulates the activity of JNK bound to IRS-1 and inhibits the insulin-stimulated tyrosine phosphorylation of IRS-1. Serine 307 is a major site of JNK phosphorylation in IRS-1. Mutation of serine 307 to alanine eliminates phosphorylation of IRS-1 by JNK and abrogates the inhibitory effect of TNFalpha on insulin-stimulated tyrosine phosphorylation of IRS-1. These results suggest that phosphorylation of serine 307 might mediate, at least partially, the inhibitory effect of proinflammatory cytokines like TNFalpha on IRS-1 function.