The Src homology 2 (SH2) domain-containing protein SH2-Bbeta binds to and is a substrate of the growth hormone (GH) and cytokine receptor-associated tyrosine kinase JAK2. SH2-Bbeta also binds, via its SH2 domain, to multiple activated growth factor receptor tyrosine kinases. We have previously implicated SH2-Bbeta in GH and platelet-derived growth factor regulation of the actin cytoskeleton. We extend these findings by establishing a potentiating effect of SH2-Bbeta on GH-dependent cell motility and defining regions of SH2-Bbeta required for this potentiation. Time-lapse video microscopy, phagokinetic, and/or wounding assays demonstrate reduced movement of cells overexpressing SH2-Bbeta lacking an intact SH2 domain because of a point mutation or a C-terminal truncation. An N-terminal proline-rich domain (amino acids 85-106) of SH2-Bbeta is required for inhibition of cellular motility by SH2 domain-deficient mutants. Co-immunoprecipitation experiments indicate that Rac binds to this domain. GH is shown to activate endogenous Rac, and dominant negative mutants of SH2-Bbeta are shown to inhibit membrane ruffling induced by constitutively active Rac. These findings suggest that SH2-Bbeta is an adapter protein that facilitates actin rearrangement and cellular motility by recruiting Rac and potentially Rac-regulating, Rac effector, or other actin-regulating proteins to activated cytokine (e.g. GH) and growth factor receptors.