Most, if not all, cytokines activate phosphatidylinositol 3-kinase (PI-3K). Although many cytokine receptors have direct binding sites for the p85 subunit of PI-3K, others, such as the interleukin-3 (IL-3) receptor beta common chain (betac) and the IL-2 receptor beta chain (IL-2Rbeta), lack such sites, leaving the mechanism by which they activate PI-3K unclear. Here, we show that the protooncoprotein Shc, which promotes Ras activation by recruiting the Grb2-Sos complex in response to stimulation of cytokine stimulation, also signals to the PI-3K/Akt pathway. Analysis of Y-->F and "add-back" mutants of betac shows that Y577, the Shc binding site, is the major site required for Gab2 phosphorylation in response to cytokine stimulation. When fused directly to a mutant form of IL-2Rbeta that lacks other cytoplasmic tyrosines, Shc can promote Gab2 tyrosyl phosphorylation. Mutation of the three tyrosyl phosphorylation sites of Shc, which bind Grb2, blocks the ability of the Shc chimera to evoke Gab2 tyrosyl phosphorylation. Overexpression of mutants of Grb2 with inactive SH2 or SH3 domains also blocks cytokine-stimulated Gab2 phosphorylation. The majority of cytokine-stimulated PI-3K activity associates with Gab2, and inducible expression of a Gab2 mutant unable to bind PI-3K markedly impairs IL-3-induced Akt activation and cell growth. Experiments with the chimeric receptors indicate that Shc also signals to the PI-3K/Akt pathway in response to IL-2. Our results suggest that cytokine receptors lacking direct PI-3K binding sites activate Akt via a Shc/Grb2/Gab2/PI-3K pathway, thereby regulating cell survival and/or proliferation.