In the present study, we identified novel negative cross-talk between the angiotensin II subtype 2 (AT2) receptor and insulin receptor signaling in the regulation of phosphoinositide 3-kinase (PI3K), Akt, and apoptosis in rat pheochromocytoma cell line, PC12W cells, which exclusively express AT2 receptor. We demonstrated that insulin-mediated insulin receptor substrate (IRS)-2-associated PI3K activity was inhibited by AT2 receptor stimulation, whereas IRS-1-associated PI3K activity was not significantly influenced. AT2 receptor stimulation did not change insulin-induced tyrosine phosphorylation of IRS-2 or its association with the p85alpha subunit of PI3K, but led to a significant reduction of insulin-induced p85alpha phosphorylation. AT2 receptor stimulation increased the association of a protein tyrosine phosphatase, SHP-1, with IRS-2. Moreover, we demonstrated that AT2 receptor stimulation inhibited insulin-induced Akt phosphorylation and that insulin-mediated antiapoptotic effect was also blocked by AT2 receptor activation. Overexpression of a catalytically inactive dominant negative SHP-1 markedly attenuated the AT2 receptor- mediated inhibition of IRS-2-associated PI3K activity, Akt phosphorylation, and antiapoptotic effect induced by insulin. Taken together, these results indicate that AT2 receptor-mediated activation of SHP-1 and the consequent inhibition IRS-2-associated PI3K activity contributed at least partly to the inhibition of Akt phosphorylation, thereby inducing apoptosis.