Stimulation of fibroblast growth factor receptor-1 (FGFR-1) is known to result in phosphorylation of tyrosine 766 and the recruitment and subsequent activation of phospholipase C-gamma (PLC-gamma). To assess the role of tyrosine 766 in endothelial cell function, we generated endothelial cells expressing a chimeric receptor, composed of the extracellular domain of the PDGF receptor-alpha and the intracellular domain of FGFR-1. Mutation of tyrosine 766 to phenylalanine prevented PLC-gamma activation and resulted in a reduced phosphorylation of FRS2 and reduced activation of the Ras/MEK/MAPK pathway relative to the wild-type chimeric receptor. However, FGFR-1-mediated MAPK activation was not dependent on PKC activation or intracellular calcium, both downstream mediators of PLC-gamma activation. We report that the adaptor protein Shb is also able to bind tyrosine 766 in the FGFR-1, via its SH2 domain, resulting in its subsequent phosphorylation. Overexpression of an SH2 domain mutant Shb caused a dramatic reduction in FGFR-1-mediated FRS2 phosphorylation with concomitant perturbment of the Ras/MEK/MAPK pathway. Expression of the chimeric receptor mutant and the Shb SH2 domain mutant resulted in a similar reduction in FGFR-1-mediated mitogenicity. We conclude, that Shb binds to tyrosine 766 in the FGFR-1 and regulates FGF-mediated mitogenicity via FRS2 phosphorylation and the subsequent activation of the Ras/MEK/MAPK pathway.