Granulocyte-macrophage colony-stimulating factor (GM-CSF) regulates the growth and function of several myeloid cell types at different stages of maturation. The effects of GM-CSF are mediated through a high affinity receptor that is composed of two chains: a unique, ligand-specific alpha chain and a beta common chain (beta c) that is also a component of the receptors for interleukin 3 (IL-3) and IL-5. Beta c plays an essential role in the transduction of extra cellular signals to the nucleus through its recruitment of secondary messengers. Several downstream signaling events induced by GM-CSF stimulation have been described, including activation of tyrosine kinases and tyrosine phosphorylation of cellular proteins (including beta c) and activation of the Ras/mitogen-activated protein kinase and the JAK/STAT pathways. A region within the beta c cytoplasmic tail (amino acids 517-763) has been reported to be necessary for tyrosine phosphorylation of the adapter protein, Shc, and for the subsequent GM-CSF-induced activation of Ras. In this paper, we describe a physical association between the tyrosine phosphorylated GM-CSF receptor (GMR)-beta c chain and Shc in vivo. Using a series of cytoplasmic truncation mutants of beta c and various mutant Shc proteins, we demonstrate that the N-terminal phosphotyrosine-binding (PTB) domain of Shc binds to a short region of beta c (amino acids 549-656) that contains Tyr577. Addition of a specific phosphopeptide encoding amino acids surrounding this tyrosine inhibited the interaction between beta c and shc. Moreover, mutation of a key residue within the phosphotyrosine binding pocket of the Shc-PTB domain abrogated its association with beta c. These observations provide an explanation for the previously described requirement for Tyr577 of beta c for GM-CSF-induced tyrosine phosphorylation of Shc and have implications for Ras activation through the GM-CSF, IL-3, and IL-5 receptors.