Cytokines manifest their function through alteration of gene expression. However, target genes for signals from cytokine receptors are largely unknown. We therefore searched for immediate-early cytokine-responsive genes and isolated a novel gene, CIS (cytokine inducible SH2-containing protein) which is induced in hematopoietic cells by a subset of cytokines including interleukin 2 (IL2), IL3, granulocyte-macrophage colony-stimulating factor (GM-CSF) and erythropoietin (EPO), but not by stem cell factor, granulocyte colony-stimulating factor and IL6. The CIS message encodes a polypeptide of 257 amino acids that contains an SH2 domain of 96 amino acids in the middle. To clarify the function of CIS in cytokine signal transduction, we expressed CIS in IL3-dependent hematopoietic cell lines under the control of a steroid-inducible promoter. The CIS product stably associated with the tyrosine-phosphorylated beta chain of the IL3 receptor as well as the tyrosine-phosphorylated EPO receptor. Forced expression of CIS by steroid reduced the growth rate of these transformants, suggesting a negative role of CIS in signal transduction. CIS induction requires the membrane-proximal region of the cytoplasmic domain of the EPO receptor as well as that of the common beta chain of the IL3, IL5 and GM-CSF receptor, whereas CIS binds to the receptor that is tyrosine phosphorylated by cytokine stimulation. Thus CIS appears to be a unique regulatory molecule for cytokine signal transduction.