Antibodies to the human Shc adaptor protein were used to isolate a cDNA encoding a Drosophila Shc protein (dShc) by screening an expression library. The dshc gene, which maps to position 67B-C on the third chromosome, encodes a 45-kDa protein that is widely expressed throughout the Drosophila life cycle. In flies, the dShc protein physically associates with the activated Drosophila epidermal growth factor receptor homolog (DER) and is inducibly phosphorylated on tyrosine by DER. The 45-kDa dShc protein is closely related both in overall organization and in amino acid sequence (46% identity) to the 52-kDa mammalian Shc isoform. In addition to a C-terminal Src homology 2 (SH2) domain, dShc contains an N-terminal phosphotyrosine-binding (PTB) domain, which associates in vitro with the autophosphorylated DER receptor tyrosine kinase and with phosphopeptides containing an Asn-Pro-X-pTyr motif, where pTyr stands for phosphotyrosine. A potential binding site for the dShc PTB domain is located at Tyr-1228 of DER. These results indicate that the shc gene has been conserved in evolution, as have the binding properties of the Shc PTB and SH2 domains. Despite the close relationship between the Drosophila and mammalian Shc proteins, dShc lacks the high-affinity Grb2-binding site found in mammalian Shc, suggesting that Shc proteins may have functions in addition to regulation of the Ras pathway.