Vascular endothelial growth factor is an important physiological regulator of angiogenesis. The function of this endothelial cell selective growth factor is mediated by two homologous tyrosine kinase receptors, fms-like tyrosine kinase 1 (Flt-1) and kinase domain receptor (KDR). Although the functional consequence of vascular endothelial growth factor binding to the Flt-1 receptor is not fully understood, it is well established that mitogenic signaling is mediated by KDR. Upon sequencing several independent cDNA clones spanning the cytoplasmic region of human KDR, we identified and confirmed the identity of a functionally required valine at position 848 in the ATP binding site, rather than the previously reported glutamic acid residue, which corresponds to an inactive tyrosine kinase. The cytoplasmic domain of recombinant native KDR, expressed as a glutathione S-transferase fusion protein, can undergo autophosphorylation in the presence of ATP. In addition, the kinase activity can be substantially increased by autophosphorylation at physiologic ATP concentrations. Mutation analysis indicates that both tyrosine residues 1054 and 1059 are required for activation, which is a consequence of an increased affinity for both ATP and the peptide substrate and has no effect on kcat, the intrinsic catalytic activity of the enzyme. KDR kinase catalyzes phosphotransfer by formation of a ternary complex with ATP and the peptide substrate. We demonstrate that tyrosine kinase antagonists can preferentially inhibit either the unactivated or activated form of the enzyme.