The type 1 insulin-like growth factor receptor (IGF-IR) plays an important role in the growth of cells both in vivo and in vitro. The IGF-IR is also capable of inducing differentiation in a number of cell types, raising the question of how the same receptor can send two seemingly contradictory signals, one for growth and one for differentiation. Using 32D cells, which are murine hemopoietic cells, we show that the activated IGF-IR can induce differentiation along the granulocytic pathway in a manner similar to the granulocyte colony-stimulating factor. We find that one of the major substrates of the IGF-IR, the insulin receptor substrate-1 inhibits IGF-I-mediated differentiation of 32D cells. In the absence of insulin receptor substrate-1, functional impairment of another major substrate of the IGF-IR, the Shc proteins, is associated with a decrease in the extent of differentiation. Although the end points of the respective pathways remain to be defined, these results show for the first time that IGF-I-mediated growth or differentiation of hemopoietic cells may depend on a balance between two of its substrates.