We have previously demonstrated that the human insulin receptor, mutated in the ATP-binding domain of the beta-subunit, is kinase-defective and fails to mediate multiple post-receptor actions of insulin in stably transfected Chinese hamster ovary cells (Chou, C.-K., Dull, T. J., Russell, D. S., Gherzi, R., Lebwohl, D., Ullrich, A., and Rosen, O. M. (1987) J. Biol. Chem. 262, 1842-1847). This study addresses the role of protein-tyrosine kinase activity in insulin-mediated receptor down-regulation. Although the mutant insulin proreceptor was properly processed and able to bind insulin like the wild-type human receptor, it differed from the latter in the following respects: 1) it failed to mediate internalization of surface-bound radiolabeled ligand; 2) it did not undergo short- or long-term down-regulation in response to 1 microM insulin; 3) it did not exhibit ligand-promoted receptor turnover; and 4) it was not phosphorylated on either tyrosine or serine residues in response to insulin. Although the cells transfected with the mutant receptor failed to respond to insulin-mediated insulin receptor down-regulation, they were able to down-regulate their insulin-like growth factor I receptors in response to insulin-like growth factor I or high concentrations of insulin and were sensitive to monoclonal antibody-induced down-regulation of their insulin receptors. Antibody-mediated receptor internalization alone, however, was unable to mimic at least one action of insulin, thymidine incorporation into DNA, and did not lead to any phosphorylation of the receptor. It is concluded that either the protein-tyrosine kinase activity of the insulin receptor or its phosphorylation state is essential for ligand-mediated receptor down-regulation.