In order to test the contribution of the insulin receptor COOH terminus to insulin action, a truncation of 43 COOH-terminal amino acids was engineered by cDNA-based deletion mutagenesis. This cDNA (HIR delta CT), as well as cDNA encoding the complete receptor (HIRc) was transfected into Rat 1 fibroblasts. Cells expressing 6.4 X 10(3) and 1.25 X 10(6) normal receptors and 2.5 X 10(5) HIR delta CT receptors, as well as control Rat 1 fibroblasts were selected for further analysis. All cell lines exhibited insulin binding of similar affinity. Partial tryptic digestion and immunoprecipitation by region-specific antibodies verified that the HIR delta CT receptors were truncated at the COOH terminus. Purified HIRc and HIR delta CT receptors underwent autophosphorylation with similar insulin and ATP sensitivity, although the HIR delta CT receptors were slightly more active in the absence of insulin. Transfected HIRc and HIR delta CT receptors undergo endocytosis in a normal fashion. Insulin internalization and degradation in both HIRc and HIR delta CT cells is increased in proportion to receptor number. Intracellular insulin processing, degradation, and release were qualitatively comparable among the transfected cell lines. Complete and truncated receptors internalize, recycle, and down-regulate normally. We conclude the following: 1) the COOH-terminal portion of the insulin receptor is not necessary for partial autophosphorylation or endocytosis; 2) following internalization the intracellular itinerary of the receptor and ligand appear normal with the truncated receptor; and 3) truncation of the COOH terminus does not impair recycling of the receptor or retroendocytosis of internalized ligand.