Cytokines are secreted proteins that regulate important cellular responses such as proliferation and differentiation(1). Key events in cytokine signal transduction are well defined : cytokines induce receptor aggregation, leading to activation of members of the JAK family of cytoplasmic tyrosine kinases. In turn, members af the STAT family of transcription factors are phosphorylated, dimerize and increase the transcription of genes with STAT recognition sites in their promoters(1-4). Less is known of how cytokine signal transduction is switched off. We have cloned a complementary DNA encoding a protein SOCS-1, containing an SH2-domain, by its ability to inhibit the macrophage differentiation of M1 cells in response to interleukin-6. Expression of SOCS-1 inhibited both interleukin-6-induced receptor phosphorylation and STAT activation. We have also cloned two-relatives of SOCS-1, named SOCS-2 and SOCS-3, which together with the previously described CIS (ref. 5) form a new family of proteins. Transcription of all four SOCS genes is increased rapidly in response to interleukin-6, in vitro and in vivo, suggesting they may act in a classic negative feedback loop to regulate cytokine signal transduction.