During leptin signaling, each of the phosphorylated tyrosine residues on the long form of the leptin receptor (LRb) mediates distinct signals. Phosphorylated Tyr(1138) binds STAT3 to mediate its tyrosine phosphorylation and transcriptional activation, while phosphorylated Tyr(985) binds the tyrosine phosphatase SHP-2 and reportedly mediates both activation of ERK kinases and inhibition of LRb-mediated STAT3 activation. We show here that although mutation of Tyr(985) does not alter STAT3 signaling by erythropoietin receptor-LRb (ELR) chimeras in transfected 293 cells at short times of stimulation, this mutation enhances STAT3 signaling at longer times of stimulation (>6 h). These data suggest that Tyr(985) may mediate feedback inhibition of LRb signaling by an LRb-induced LRb inhibitor, such as SOCS3. Indeed, SOCS3 binds specifically to phosphorylated Tyr(985) of LRb, and SOCS3 fails to inhibit transcription by ELR following mutation of Tyr(985), suggesting that SOCS3 inhibits LRb signaling by binding to phosphorylated Tyr(985). Additionally, overexpression of SOCS3, but not SHP-2, impairs ELR signaling, and the overexpression of SHP-2 blunts SOCS3-mediated inhibition of ELR signaling. Thus, our data suggest that in addition to mediating SHP-2 binding and ERK activation during acute stimulation, Tyr(985) of LRb mediates feedback inhibition of LRb signaling by binding to LRb-induced SOCS3.