Our previous studies have shown that the deletion of the insulin receptor carboxyl terminus impairs metabolic, but augments mitogenic, signaling (McClain, D. A., Maegawa, H., Levy, J., Huecksteadt, T., Dull, T. J., Lee, J., Ullrich, A., and Olefsky, J. M. (1988) J. Biol. Chem. 263, 8904-8911; Thies, R.S., Ulrich, A., and McClain, D. A. (1989) J. Biol. Chem. 264, 12820-12825). To explore further the regulatory role of the insulin receptor carboxyl terminus, a mutant insulin receptor was constructed in which the two tyrosines (Y1316 and Y1322) on the carboxyl terminus were replaced with phenylalanines. Rat 1 fibroblasts expressing high levels of this mutant receptor (Y/F2 cells) exhibited normal insulin binding and normal insulin internalization. The absence of the two tyrosines in the carboxyl terminus did not affect the phosphotransferase activity of the beta-subunit and insulin-stimulated glucose transport. However, the Y/F2 cells showed markedly enhanced sensitivity for insulin-stimulated DNA synthesis. Dose-response curves for both insulin-stimulated thymidine uptake and 5-bromo-2-deoxyuridine incorporation in the Y/F2 cell lines were shifted to the left (4-10-fold) compared with those observed in the cells expressing similar numbers of wild type receptors. Thus, the two tyrosines of the insulin receptor carboxyl terminus do not modulate the kinase function of the insulin receptor, although they are autophosphorylated in native receptors. Moreover, these tyrosines are not necessary for stimulation of glucose transport. On the other hand, these results suggest that the two carboxyl-terminal tyrosine residues exert an inhibitory effect on mitogenic signaling in native insulin receptors.