Insulin-like growth factor 1 receptor (IGF-1R) is important for transformation of cells with cellular and viral oncogenes. This knowledge is mainly based on experiments on IGF-1R knockout mouse fibroblasts, which mostly are unable to transform after introduction of various oncogenes. Recently, we observed two variants of R- cells, one of which (R-s) surprisingly expresses the beta-subunit of IGF-1R whereas the other one (R-r) does not. Here we show that the beta-subunit is localized intracellularly and forms perinuclear aggregates. It expresses tyrosine kinase activity and appears to be crucial for cell survival since knockdown of it kills the R-s cells. H-RasV12 and/or polyoma middle T-antigen fail to transform R-r, whereas R- cells expressing the beta-subunit were transformed as assessed by formation of colonies in soft agar. The oncogenic transformation of R-s cells was, however, abrogated when the aberrant beta-subunit was knockdown by siRNA. The occurrence of intracellular IGF-1R, especially in tumor cells, has been widely reported but its function has not been understood. Our study provides evidence that it may be important for cell survival and transformation.