To examine the role of the transmembrane domain (TM) of the insulin receptor in insulin-induced receptor kinase activation, we prepared four mutated insulin receptors: 1) a Val938----Asp substitution (IR/TMv----D), 2) insertion of a 3-amino acid repeat (Val938-Phe939-Leu940) (IR/TM+3), or the entire TM was replaced by the corresponding domain of either the 3) platelet-derived growth factor (PDGF) receptor (IR/TMPDGFR) or 4) c-neu/erbB2 proto-oncogene product (IR/TMc-neu). Each mutant receptor was stably expressed in Chinese hamster ovary cells, assessed by fluorescence-activated cell sorting, insulin binding, and biosynthetic labeling. All mutant receptors exhibited normal affinity for insulin. Pulse-chase experiments showed that each proreceptor was processed into alpha- and beta-subunits, although the rate of IR/TMV----D conversion was reduced approximately 3-fold. With IR/TMPDGFR, IR/TMV----D, and IR/TM+3 basal and insulin-stimulated levels of autophosphorylation and tyrosine kinase activation were normal, both in wheat germ agglutinin (WGA)-purified receptor preparations and intact cells. By contrast, following WGA purification or isolation of crude membranes, IR/TMc-neu was a constitutively active autokinase and substrate kinase in vitro. However, in intact cells insulin-stimulated autophosphorylation and kinase activity appeared normal. We conclude that although there is considerable latitude in acceptable structure, residues within the insulin receptor transmembrane domain can play a functional role in regulation of insulin receptor tyrosine kinase activity.