We have characterized the internalization and down-regulation of the insulin receptor and nine receptors with mutations in the transmembrane (TM) domain and/or flanking charged amino acids to define the role of this domain in receptor cycling. When expressed in Chinese hamster ovary cells, all had normal tetrameric structure and normal insulin-stimulated autophosphorylation/kinase activity. Replacement of the TM domain with that of the platelet-derived growth factor receptor, insertion of 3 amino acids, and substitution of Asp for Val938 or of Ala for either Gly933 or Pro934 had no effect on internalization. Replacement of the TM domain with that of c-neu or conversion of the charged amino acids on the cytoplasmic flank to uncharged amino acids, on the other hand, resulted in a 40-60% decrease in insulin-dependent internalization rate constants. By contrast, substitution of Ala for both Gly933 and Pro934 increases lateral diffusion mobility and accelerates internalization rate. These changes in internalization were due to decreased or increased rates of redistribution of receptors from microvilli to the nonvillous cell surface. In all cases, receptor down-regulation and receptor-mediated insulin degradation paralleled the changes in internalization. Thus, the structure of the transmembrane domain of the insulin receptor and flanking amino acids are major determinants of receptor internalization, insulin degradation, and receptor down-regulation.