We have studied the function of a mutant insulin receptor (IR) molecule in which Tyr-1146, one of the first autophosphorylation sites in the beta subunit, was replaced with phenylalanine (IRF1146). Autophosphorylation of the partially purified IRF1146 was reduced 60-70% when compared to the wild-type IR but was still stimulated by insulin. The phosphotransferase activity of the dephospho form of both the IR and IRF1146 toward exogenous substrates was stimulated 3- to 4-fold by insulin. However, the wild-type IR was activated 12-fold by autophosphorylation, whereas the IRF1146 was activated only 2-fold. When the IRF1146 was expressed in Chinese hamster ovary (CHO) cells, insulin binding was normal, whereas autophosphorylation was reduced 80% when compared to cells expressing the wild-type IR. Endogenous substrates of the insulin receptor kinase were not detected during insulin stimulation of CHO cells expressing the IRF1146. Moreover, the IRF1146 did not internalize insulin rapidly or stimulate DNA synthesis in the presence of insulin. In contrast, both the IR and IRF1146 stimulated glycogen synthase equally in CHO cells. These data suggest that activation of the IR tyrosine kinase can be resolved into two components: the first is dependent on insulin binding and the second is dependent on the subsequent insulin-stimulated autophosphorylation cascade. Thus, at least two signal transduction pathways diverging from the IR are implicated in the mechanism of insulin action.