Several rapid physiological effects of thyroid hormone on mammalian cells in vitro have been shown to be mediated by the phosphatidylinositol 3-kinase (PI3K), but the molecular mechanism of PI3K regulation by nuclear zinc finger receptor proteins for thyroid hormone and its relevance to brain development in vivo have not been elucidated. Here we show that, in the absence of hormone, the thyroid hormone receptor TRβ forms a cytoplasmic complex with the p85 subunit of PI3K and the Src family tyrosine kinase, Lyn, which depends on two canonical phosphotyrosine motifs in the second zinc finger of TRβ that are not conserved in TRα. When hormone is added, TRβ dissociates and moves to the nucleus, and phosphatidylinositol (3, 4, 5)-trisphosphate production goes up rapidly. Mutating either tyrosine to a phenylalanine prevents rapid signaling through PI3K but does not prevent the hormone-dependent transcription of genes with a thyroid hormone response element. When the rapid signaling mechanism was blocked chronically throughout development in mice by a targeted point mutation in both alleles of Thrb, circulating hormone levels, TRβ expression, and direct gene regulation by TRβ in the pituitary and liver were all unaffected. However, the mutation significantly impaired maturation and plasticity of the Schaffer collateral synapses on CA1 pyramidal neurons in the postnatal hippocampus. Thus, phosphotyrosine-dependent association of TRβ with PI3K provides a potential mechanism for integrating regulation of development and metabolism by thyroid hormone and receptor tyrosine kinases.