An intriguing question in cell biology is what targets proteins to, and regulates their translocation between, specific cellular locations. Here we report that the polybasic nuclear localization sequence (NLS) required for nuclear entry of the adapter protein and candidate human obesity gene product SH2B1β, also localizes SH2B1β to the plasma membrane (PM), most probably via electrostatic interactions. Binding of SH2B1β to the PM also requires its dimerization domain. Phosphorylation of serine residues near this polybasic region, potentially by protein kinase C, releases SH2B1β from the PM and enhances nuclear entry. Release of SH2B1β from the PM and/or nuclear entry appear to be required for SH2B1β enhancement of nerve growth factor (NGF)-induced expression of urokinase plasminogen activator receptor gene and neurite outgrowth of PC12 cells. Taken together, our results provide strong evidence that the polybasic NLS region of SH2B1 serves the dual function of localizing SH2B1 to both the nucleus and the PM, the latter most probably through electrostatic interactions that are enhanced by SH2B1β dimerization. Cycling between the different cellular compartments is a consequence of the phosphorylation and dephosphorylation of serine residues near the NLS and is important for physiological effects of SH2B1, including NGF-induced gene expression and neurite outgrowth.