A point mutation in the human insulin receptor gene in a patient with type A insulin resistance alters the amino acid sequence within the tetrabasic processing site of the proreceptor molecule from Arg-Lys-Arg-Arg to Arg-Lys-Arg-Ser. Epstein-Barr virus-transformed lymphocytes from this patient synthesize an insulin receptor precursor that is normally glycosylated and inserted into the plasma membrane but is not cleaved to mature alpha and beta subunits. Insulin binding to these cells is severely reduced but can be increased about fivefold by gentle treatment with trypsin, accompanied by the appearance of normal alpha subunits. These results indicate that proteolysis of the proreceptor is necessary for its normal full insulin-binding sensitivity and signal-transducing activity and that a cellular protease that is more stringent in its specificity than trypsin is required to process the receptor precursor.