We identified the major autophosphorylation sites in the insulin receptor and correlated their phosphorylation with the phosphotransferase activity of the receptor on synthetic peptides. The receptor, purified from Fao hepatoma cells on immobilized wheat germ agglutinin, undergoes autophosphorylation at several tyrosine residues in its beta-subunit; however, anti-phosphotyrosine antibody (alpha-PY) inhibited most of the phosphorylation by trapping the initial sites in an inactive complex. Exhaustive trypsin digestion of the inhibited beta-subunit yielded two peptides derived from the Tyr-1150 domain (Ullrich, A, Bell, J. R., Chen, E. Y., Herrera, R., Petruzzelli, L. M., Dull, T. J., Gray, A., Coussens, L., Liao, Y.-C., Tsubokawa, M., Mason, A., Seeburg, P. H., Grunfeld, C., Rosen, O. M., and Ramachandran, J. (1985) Nature 313, 756-761) called pY4 and pY5. Both peptides contained 2 phosphotyrosyl residues (2Tyr(P], one corresponding to Tyr-1146 and the other to Tyr-1150 or Tyr-1151. In the absence of the alpha-PY additional sites were phosphorylated. The C-terminal domain of the beta-subunit contained phosphotyrosine at Tyr-1316 and Tyr-1322. Removal of the C-terminal domain by mild trypsinolysis did not affect the phosphotransferase activity of the beta-subunit suggesting that these sites did not play a regulatory role. Full activation of the insulin receptor during in vitro assay correlated with the appearance of two phosphopeptides in the tryptic digest of the beta-subunit, pY1 and pY1a, that were inhibited by the alpha-PY. Structural analysis suggested that pY1 and pY1a were derived from the Tyr-1150 domain and contained 3 phosphotyrosyl residues (3Tyr(P] corresponding to Tyr-1146, Tyr-1150, and Tyr-1151. The phosphotransferase of the receptor that was phosphorylated in the presence of alpha-PY at 2 tyrosyl residues in the Tyr-1150 domain was not fully activated during kinase assays carried out with saturating substrate concentrations which inhibited further autophosphorylation. During insulin stimulation of the intact cell, the 3Tyr(P) form of the Tyr-1150 domain was barely detected, whereas the 2Tyr(P) form predominated. We conclude that 1) autophosphorylation of the insulin receptor begins by phosphorylation of Tyr-1146 and either Tyr-1150 or Tyr-1151; 2) progression of the cascade to phosphorylation of the third tyrosyl residue fully activates the phosphotransferase during in vitro assay; 3) in vivo, the 2Tyr(P) form predominates, suggesting that progression of the autophosphorylation cascade to the 3Tyr(P) form is regulated during insulin stimulation.(ABSTRACT TRUNCATED AT 400 WORDS)