THE FATE OF T lymphocytes following an encounter with antigens is determined by specific nuclear events that are modulated by the balanced action of positive and negative cytoplasmic signaling pathways. The role of specific proteins involved in these pathways may vary, depending upon the nature of the stimulation and cellular context. A single protein can participate in the formation of several distinct multi-molecular complexes. These associations may be regulated by subcellular localization and modifications in the conformation of the protein induced by changes in its phosphorylation state. The phosphorylation state of a protein is controlled by the action of kinases that add a phosphate group and by phosphatases that remove phosphates. In addition to the regulation of complex formations induced by phosphorylation changes, the activities of enzymes may also be modified by the addition or removal of a phosphate. For example, the protein tyrosine kinase (PTK), Lck, can become activated by phosphorylation on tyrosine 394, but only when tyrosine 505 has been dephosphorylated. Similarly, phosphorylation or dephosphorylation on serine or threonine residues may also activate or inhibit complex formation or enzymatic activity. Several recent reviews address the positive and negative pathways of kinases and phosphatases in lymphocyte signaling [see and references therein]. We will focus on the roles of two adapter proteins that are substrates of PTKs and protein tyrosine phosphatases during T cell activation: Shc, a positive regulator of lymphocyte function and Cbl, a negative regulator of lymphocyte function (see Fig 1). Adapter proteins do not possess enzymatic activity, yet they are centrally involved in complexes that regulate the activities of other enzymes. Shc was originally identified as an oncogene that induced tumor formation in nude mice. Three isoforms of Shc (46, 52, and 66 kDa) are expressed in a variety of tissues. The 66 kDa isoform is not expressed in hematopoietic cells. Shc is comprised of an N-terminal phosphotyrosine binding domain (PTB), a central collagen homology domain (CH), and a C-terminal SH2 domain. In T cells, the PTB domain of Shc mediates interaction with SHIP, a phosphatidylinositol phosphatase, and the interleukin-2 receptor b chain (IL-2Rb). In other cell types, Shc-PTB interacts with the receptors for epidermal growth factor (EGF), nerve growth factor (NGF), and the b common chain shared by the receptors for IL-3, IL-5, and granulocyte-macrophage colony stimulating factor (GM-CSF). To date, the CH domain of Shc has only been shown to mediate the interaction of Shc with Grb2, although there are two distinct Grb2 binding sites within the CH domain. The SH2 domain of Shc binds to TCR-z and the platelet derived growth factor receptor (PDGF). Cbl was also initially identified as an oncogene isolated from a murine retrovirus. A C. elegans protein that shares amino acid homology with the N-terminus of Cbl, Sli-1, was shown to function as a negative regulator of Let-60, a Ras homologue, downstream of EGFR signaling. Cbl contains an N-terminal PTB domain, a proline-rich region that mediates interactions with SH3 domains of other proteins, a leucine zipper, and several tyrosines that may form