Owing to its essential role in cancer, insulin-like growth factor type 1 receptor (IGF-1R)-targeted therapy is an exciting approach for cancer treatment. However, when translated into clinical trials, IGF-1R-specific antibodies did not fulfill expectations. Despite promising clinical responses in Ewing's sarcoma (ES) phase I/II trials, phase III trials were discouraging, requiring bedside-to-bench translation and functional reevaluation of the drugs. The anti-IGF-1R antibody figitumumab (CP-751,871; CP) was designed as an antagonist to prevent ligand-receptor interaction but, as with all anti-IGF-1R antibodies, it induces agonist-like receptor down-regulation. We explored this paradox in a panel of ES cell lines and found their sensitivity to CP was unaffected by presence of IGF-1, countering a ligand blocking mechanism. CP induced IGF-1R/β-arrestin1 association with dual functional outcome: receptor ubiquitination and degradation and decrease in cell viability and β-arrestin1-dependent ERK signaling activation. Controlled β-arrestin1 suppression initially enhanced CP resistance. This effect was mitigated on further β-arrestin1 decrease, due to loss of CP-induced ERK activation. Confirming this, the ERK1/2 inhibitor U0126 increased sensitivity to CP. Combined, these results reveal the mechanism of CP-induced receptor down-regulation and characteristics that functionally qualify a prototypical antagonist as an IGF-1R-biased agonist: β-arrestin1 recruitment to IGF-1R as the underlying mechanism for ERK signaling activation and receptor down-regulation. We further confirmed the consequences of β-arrestin1 regulation on cell sensitivity to CP and demonstrated a therapeutic strategy to enhance response. Defining and suppressing such biased signaling represents a practical therapeutic strategy to enhance response to anti-IGF-1R therapies.