SH2-Bbeta has been shown to bind via its SH2 (Src homology 2) domain to tyrosyl-phosphorylated JAK2 and strongly activate JAK2. In this study, we demonstrate the existence of an additional binding site(s) for JAK2 within the N-terminal region of SH2-Bbeta (amino acids 1 to 555) and the ability of this region of SH2-B to inhibit JAK2. Four lines of evidence support the existence of this additional binding site(s). In a glutathione S-transferase pull-down assay, wild-type SH2-Bbeta and SH2-Bbeta(R555E) with a defective SH2 domain bind to both tyrosyl-phosphorylated JAK2 from growth hormone (GH)-treated cells and non-tyrosyl-phosphorylated JAK2 from control cells, whereas the SH2 domain of SH2-Bbeta binds only to tyrosyl-phosphorylated JAK2 from GH-treated cells. Similarly, JAK2 is present in alphaSH2-B immunoprecipitates in the absence and presence of GH, with GH substantially increasing the coprecipitation of JAK2 with SH2-B. When coexpressed in COS cells, SH2-Bbeta coimmunoprecipitates not only wild-type, tyrosyl-phosphorylated JAK2 but also kinase-inactive, non-tyrosyl-phosphorylated JAK2(K882E), although to a lesser extent. DeltaC555 (amino acids 1 to 555 of SH2-Bbeta) that lacks most of the SH2 domain binds similarly to wild-type JAK2 and kinase-inactive JAK2(K882E). Experiments using a series of N- and C-terminally truncated SH2-Bbeta constructs indicate that the pleckstrin homology (PH) domain (amino acids 269 to 410) and amino acids 410 to 555 are necessary for maximal binding of SH2-Bbeta to inactive JAK2, but neither region alone is sufficient for maximal binding. The SH2 domain of SH2-Bbeta is necessary and sufficient for the stimulatory effect of SH2-Bbeta on JAK2 and JAK2-mediated tyrosyl phosphorylation of Stat5B. In contrast, DeltaC555 lacking the SH2 domain, and to a lesser extent the PH domain alone, inhibits JAK2. DeltaC555 also blocks JAK2-mediated tyrosyl phosphorylation of Stat5B in COS cells and GH-stimulated nuclear accumulation of Stat5B in 3T3-F442A cells. These data indicate that in addition to the SH2 domain, SH2-Bbeta has one or more lower-affinity binding sites for JAK2 within amino acids 269 to 555. The interaction via this site(s) in SH2-B with inactive JAK2 seems likely to increase the local concentration of SH2-Bbeta around JAK2, thereby facilitating binding of the SH2 domain to ligand-activated JAK2. This would result in a more rapid and robust cellular response to hormones and cytokines that activate JAK2. This interaction between inactive JAK2 and SH2-B may also help prevent abnormal activation of JAK2.