Our previous studies indicated that amino acid residues 240-250 in the cysteine-rich region of the human insulin receptor alpha-subunit constitute a site in which insulin binds (Yip, C. C., Hsu, H., Patel, R. G., Hawley, D. M., Maddux, B. A., and Goldfine, I. D. (1988) Biochem. Biophys. Res. Commun. 157, 321-329). We have now constructed a human insulin receptor mutant in which 3 residues in this sequence were altered (Thr-Cys-Pro-Pro-Pro-Tyr-Tyr-His-Phe-Gln-Asp to Thr-Cys-Pro-Arg-Arg-Tyr-Tyr-Asp-Phe-Gln-Asp) and have expressed this mutant in rat hepatoma (HTC) cells. When compared with cells transfected with normal insulin receptors, cells transfected with mutant receptors had an increase in insulin-binding affinity and a decrease in the dissociation of bound 125I-insulin. Studies using solubilized receptors also demonstrated that mutant receptors had a higher binding affinity than normal receptors. In contrast, cells transfected with either mutant or normal receptors bound monoclonal antibodies against the receptor alpha-subunit with equal affinity. When receptor tyrosine kinase activity and alpha-aminoisobutyric acid uptake were measured, cells transfected with mutant insulin receptors were more sensitive to insulin than cells transfected with normal receptors. These findings lend further support therefore to the hypothesis that amino acid sequence 240-250 of the human insulin receptor alpha-subunit constitutes one site that interacts with insulin, and they indicate that mutations in this site can influence insulin receptor binding and transmembrane signaling.