Human fetuin, (α₂-Heremans Schmid Glycoprotein (α₂-HSG)], is a natural inhibitor of insulin receptor tyrosine kinase activity (IR-TKA). Previously, we have demonstrated that α₂-HSG inhibits the mitogenic pathway without affecting the metabolic arm of insulin signal transduction. In this study, we demonstrate the time-course and specificity of inhibition, its interaction with IR and probable physiological role. In intact rat1 fibroblasts overexpressing the human insulin receptor (HIRc B), incubation of recombinant human α₂-HSG^bac (1.8 μM) inhibited insulin-induced IR autophosphorylation by over 80%. This inhibitory effect of α₂-HSG^bac on insulin-induced IR autophosphorylation was blunted by half in 60 min. Interestingly, α₂-HSG^bac at similar concentrations (0.9 or 1.8 μM), had no effect on EGF- or IGF-I-induced cognate receptor autophosphorylation. Anti-α₂-HSG immunoprecipitates of α₂-HSG^bac-treated HIRc B cell lysates demonstrated the presence of IR. Our data suggest that α₂-HSG^bac preferentially interacts with the activated IR. To further characterize the site(s) of interaction, the effect of α₂-HSG^bac on trypsin-treated IR autophosphorylation was studied. Trypsin-treatment of intact HIRc B cells results in proteolysis of the IR α-chain and constitutive activation of IR-TKA. We demonstrate that α₂-HSG^bac (0.1 μM) completely inhibited trypsin-activated IR autophosphorylation and TKA in vitro indicating that this effect was not mediated by its interaction with the proximal 576 amino acid residues of the IR α-subunit. The physiological relevance of these observations was explored by characterizing the effects of α₂-HSG injection in rats. α₂-HSG^bac (2 μM), acutely injected through the portal vein of normal rats, inhibited insulin-stimulated IR autophosphorylation and IRS-1 phosphorylation in liver and hindlimb muscle. Taken together our results suggest that α₂-HSG, by interacting with IR, specifically inhibits insulin-stimulated IR autophosphorylation and may play a physiological role in the regulation of insulin signaling.