We have created a deletion mutant of the insulinlike growth factor type 1 receptor (IGF-1 R) which lacks the 36 amino acids (aa) immediately N-terminal to the transmembrane domain (Delta 870-905 IGF-1 R), This region has been reported to have a negative effect on the transforming potential of an avian sarcoma virus gag-IGF-l R fusion protein, We have sought to determine whether this region plays a similar role in the intact IGF-1 R. Analysis of the tyrosine kinase activity of the Delta 870-905 IGF-1 R shows that the mutant receptor is autophosphorylated without IGF-1 stimulation, indicating that the tyrosine kinase domain is constitutively active, In addition, processing of the receptor is decreased, resulting in accumulation of a high molecular weight proreceptor containing both a and beta-subunits. A well-characterized substrate of the IGF-1 R, IRS-1, is constitutively phosphorylated by the Delta 870-905 IGF-1 R and phosphoinositide (PI) 3-kinase activity, which is normally activated by the phosphorylation of IRS-1 following IGF-1 stimulation, is increased even in the absence of IGF-1. A second intracellular signal pathway normally activated by IGF-I, the MAP kinase pathway, showed no increase in activity in the absence of IGF-1. The Delta 870-905 IGF-1 R promoted cell proliferation only in the presence of IGF-1. We conclude that this deletion increases the basal activity of the IGF-1 receptor tyrosine kinase and activates PI 3-kinase, but is unable to stimulate MAP kinase in the absence of ligand, These results confirm those seen in the gag-IGF-l R fusion protein and indicate that aa 870-905 exert a negative effect on the tyrosine kinase domain of the beta-subunit of the IGF-1 R. (C) 1998 Academic Press.