The first cloned chain (IFNAR1) of the human interferon-alpha (IFN alpha) receptor acts as a species-specific transducer for type 1 IFN action when transfected into heterologous mouse cells. Stably transfected mouse L929 cell lines expressing truncation mutants of the intracellular domain of the human IFNAR1 chain were tested for biological responses to human IFN alpha. Deletion of the intracellular domain resulted in a complete loss of sensitivity to the biological activity of human IFN but markedly increased IFNAR1 cell surface expression, demonstrating that the intracellular domain is required for biological function and contains a domain that negatively regulates its cell surface expression. Removal of the conserved membrane distal 16-amino-acid IRTAM (Interferon Receptor Tyrosine Activation Motif) sequence: (1) increased sensitivity to IFN alpha's antiviral activity, (2) increased the rapid IFN alpha-dependent formation of STAT-containing DNA-binding complexes, (3) prolonged tyrosine phosphorylation kinetics of the JAK-STAT pathway, and (4) blocked the IFN-dependent down-regulation of the IFNAR1 chain. These results indicate that the IRTAM negatively regulates signalling events required for the induction of IFN's biological actions via regulating receptor down-regulation.