The adipocyte-derived hormone leptin signals the status of body energy stores by activating the long form of the leptin receptor (LRb). Activation of LRb results in the activation of the associated Jak2 tyrosine kinase and the transmission of downstream phosphotyrosine-dependent signals. We have investigated the signaling function of mutant LRb intracellular domains under the control of the extracellular erythropoietin (Epo) receptor. By using this system, we confirm that two tyrosine residues in the intracellular domain of murine LRb become phosphorylated to mediate LRb signaling; Tyr(985) controls the tyrosine phosphorylation of SHP-2, and Tyr(1138) controls STAT3 activation. We furthermore investigated the mechanisms by which LRb controls downstream ERK activation and c-fos and SOCS3 message accumulation. Tyr(985)-mediated recruitment of SHP-2 does not alter tyrosine phosphorylation of Jak2 or STAT3 but results in GRB-2 binding to tyrosine-phosphorylated SHP-2 and is required for the majority of ERK activation during LRb signaling. Tyr(985) and ERK activation similarly mediate c-fos mRNA accumulation. In contrast, SOCS3 mRNA accumulation requires Tyr(1138)-mediated STAT3 activation. Thus, the two LRb tyrosine residues that are phosphorylated during receptor activation mediate distinct signaling pathways as follows: SHP-2 binding to Tyr(985) positively regulates the ERK --> c-fos pathway, and STAT3 binding to Tyr(1138) mediates the inhibitory SOCS3 pathway.