To assess a possible role for the Src homology 2 (SH2) domain adaptor protein Shb in PC12 cell signal transduction and differentiation, we have investigated the expression of Shb in PC12 cells and found that the differentiation factors nerve growth factor (NGF) and basic fibroblast growth factor (bFGF), as well as the PC12 cell mitogen epidermal growth factor, increased Shb protein expression and Shb mRNA steady-state levels. Two PC12 cell clones stably overexpressing the Shb cDNA exhibited enhanced NGF- or bFGF-induced differentiation, assessed as neurite outgrowth. This effect showed no direct correlation to mitogen-activated protein kinase activation, although the mitogen-activated protein kinase/kinase inhibitor PD-98059 caused a partial inhibition of neurite outgrowth. Furthermore, it was found that the Shb-overexpressing cells extended neurites in response to epidermal growth factor. The effects of Shb overexpression on neurite outgrowth required a functional SH2 domain because PC12 cells expressing Shb with an inactivated SH2 domain did not differentiate more readily in response to NGF. Tyrosine phosphorylation of the p13 Suc1-associated neurotrophic factor-induced tyrosine-phosphorylated target protein in response to bFGF was strongly inhibited by Shb overexpression, without correlating with the corresponding rate of neurite outgrowth. NGF-induced tyrosine phosphorylation of phospholipase Cgamma, TrkA, and Shc was unaltered in the Shb-overexpressing cells, whereas that of Shb was greatly enhanced in these cells compared with control PC12-neo cells. In addition, an NGF-activated Mr 140,000 phosphotyrosine protein was found to be associated with Shb in immunoprecipitation experiments. The data in this study suggest that Shb is involved in transmission of NGF- and bFGF-dependent differentiation signals in PC12 cells.