Both exogenously added vanadate (oxidation state +5) and vanadyl (oxidation state +4) mimic the rapid responses of insulin through alternative signaling pathways, not involving insulin receptor activation [reviewed in Shechter et al. (1995) Mol. Cell. Biochem. 153, 39-47]. Vanadium exhibits complex chemistry, fluctuating between vanadate(+5) and vanadyl(+4), according to the prevailing conditions. Using several experimental approaches, we report here on a distinct vanadate(+5)-independent, vanadyl(+4)-dependent activating pathway. The key components of this pathway are membrane protein phosphotyrosine phosphatases (PTPases) and a cytosolic (nonreceptor) protein-tyrosine kinase (CytPTK). We further suggest that vanadate(+5) is not reduced rapidly to vanadyl(+4) inside the cell, and entered vanadyl sulfate(+4) is capable of undergoing spontaneous oxidation to vanadate(+5) in vivo. Finally, we show that the promotion and full expression of a downstream bioeffect such as lipogenesis requires both activation of CytPTK and prolonged stability of vanadyl(+4) against oxidation.