Shb is a recently described Src homology 2 (SH2) domain-containing adaptor protein. Here we show that Shb is expressed in lymphoid tissues, and is recruited into signaling complexes upon activation of Jurkat T cells. Grb2 binds proline-rich motifs in Shb via its SH3 domains. As a result, a number of proteins detected in anti-Shb and anti-Grb2 immunoprecipitates are shared, including phosphoproteins of 22, 36/38, 55/57 and 70 kDa. Shb-association with p22, which represents the T cell receptor associated zeta chain, occurs through the Shb SH2 domain. The central region of Shb binds p36/38. Since this interaction was inhibited by phosphotyrosine, this region of Shb is likely to contain a non-SH2 PTB (phosphotyrosine binding) domain. The Shb PTB domain was found to preferentially bind the sequence Asp-Asp-X-pTyr when incubated with a phosphopeptide library. A peptide corresponding to a phosphorylation site in 34 kDa Lnk inhibited association between Shb and p36/38. Overexpression of Shb in Jurkat cells led to increased basal phosphorylation of Shb-associated p36/38 and p70 proteins. Inactivation of the Shb SH2 domain by an R522K mutation resulted in a reduced stimulation of tyrosine phosphorylation of several proteins in response to CD3 crosslinking when expressed in Jurkat cells. Together, our results show three distinct domains of Shb all participate in the formulation of multimeric signaling complexes in activated T cells. These results indicate that the Shb protein functions in T cell receptor signaling.