The cytoplasmic protein-tyrosine kinase domain of the insulin receptor (residues 959-1355) has been expressed as a soluble protein in Sf9 insect cells via a Baculovirus expression vector (Ellis, L., Levitan, A., Cobb, M.H., and Ramos, P. (1988) J. Virol. 62, 1634-1639). The purified protein is a monomer as judged by its behavior in sucrose gradients and on gel filtration in the presence or absence of protamine. The initial rate of autophosphorylation using 3 mM MgCl2 is increased 20-30-fold by protamine. A maximum of 4-5 mol of phosphate are incorporated per mol of enzyme. The activity of the enzyme as a function of phosphorylation state was studied for three substrates: a synthetic dodecapeptide derived from the sequence of the major autophosphorylation site in the insulin receptor, poly(Glu, Tyr), 4:1, and histone 2B. Autophosphorylation of the protein to a stoichiometry of 4-5 mol of phosphate/mol increases its enzymatic activity as much as 200-fold; a 30-fold increase in activity occurs upon addition of 1 mol of phosphate/mol. The activities of unphosphorylated enzyme with the three substrates are 3.4, 2.3, and 0.44 nmol/min/mg, respectively. The activities of the autophosphorylated enzyme with the three substrates are 175, 274, and 45 nmol/min/mg, respectively. Exposure of the autophosphorylated enzyme to ADP results in a loss of phosphate from the enzyme which is associated with a decrease in enzymatic activity. Autophosphorylation of the kinase in the presence or absence of protamine displays a marked dependence on enzyme concentration. Furthermore, the rate of autophosphorylation decreases as the viscosity of the solution increases. Taken together, these data suggest that phosphorylation occurs via an intermolecular reaction.