The activation of the insulin/insulin-like growth factor I (IGF-I) receptor and the subsequent tyrosine phosphorylation of insulin receptor substrates (IRSs) are key initial events in a variety of insulin/IGF bioactivities, including mitogenesis. It has been reported that IRS-1 associates with intracellular membrane compartments, and this localization is believed to be important for insulin/IGF signal transduction. However, the molecular mechanisms underlying IRS-1 localization remain unclear. Here we show that in L6 myoblasts, IRS-1 associates with μ1A of the ubiquitously expressed AP-1 complex, which packages cargo proteins into clathrin-coated vesicles derived from intracellular membranes. While wild-type IRS-1 was predominantly localized to vesicular structures, IRS-1 mutants lacking three YXXΦ motifs responsible for binding to μ1A were mislocalized to the mannose-6-phosphate receptor-positive structures, suggesting that AP-1-dependent transport to peripheral vesicles is inhibited in these mutants. Furthermore, deletion of AP-1 binding sites in IRS-1 impaired IGF-I-induced cell proliferation, accompanied by reduced tyrosine phosphorylation of IRS-1 and its association with phosphoinositide (PI) 3-kinase. These data demonstrate the importance of AP-1-dependent localization of IRS-1 in mediating IGF-I-stimulated signaling and maximum mitogenic response.