Activation of the insulin receptor, like other tyrosine kinase receptors, appears to require dimerization. We have shown previously that, even in the absence of insulin, full receptor activation can be induced by changes in the receptor transmembrane domain (TMD), suggesting that TMD dimerization is sufficient for receptor activation. To further understand the importance of the TMD in insulin receptor activation, we have inverted the entire TMD sequence including flanking basic amino acids, residue-for-residue. This mutation was predicted to alter the ability of a TMD alpha-helix to form homodimers and higher level aggregates. Despite apparently normal protein folding on either side of the membrane, this mutation caused ER retention and, for those receptors that reached the cell surface, blockade of insulin-stimulated kinase signal transmission. However, the signaling blockade could be overcome by proteolytic activation with trypsin. In contrast, shifting only the basic cytoplasmic residues to the opposite side of the TMD or mutation to neutral residues had no detectable effect on assembly, biosynthesis, topology, or signaling. These findings extend our previous observations to suggest that TMD interactions within the membrane are not only sufficient for receptor activation, but may be required. TMD interactions also appear to be necessary for oligomeric assembly and biosynthetic maturation of the insulin receptor.