The effect of six point mutations causing various human skeletal dysplasias, occurring in the transmembrane (TM) and kinase domains (KD) of fibroblast growth factor receptor 3, were introduced into a chimera composed of the extracellular domain of human platelet-derived growth factor beta and the TM and intracellular domains of hFGFR3. Stable transfectants in rat PC12 cells showed distinct differences in the two classes of mutations. The cells containing TM mutants displayed normal expression and activation but higher responsiveness to lower doses of ligand. The KD mutants showed significantly altered expression patterns. Normal amounts of a lower Mr receptor (p130) reflecting incomplete glycosylation, but only greatly decreased amounts of the mature (p170) form, were observed. However, the latter material showed normal ligand-dependent activation. In contrast, the p130 form, which is regularly observed in the expression of both native and chimeric receptors, exhibits strong ligand-independent tyrosine phosphorylation, particularly with the K650E mutation. Expression of two of the KD mutants (K650M and K650E), under control of an inducible metallothionein promoter, indicated that this receptor was sufficiently autoactivated to produce at least partial differentiation and, in the case of the K650E mutation, to induce ligand-independent neurite outgrowth. A model is presented that suggests that the low Mr (p130) KD mutants can, under the right conditions, signal intracellularly, but when they are fully glycosylated and move to the cell surface they adopt a normal, inhibited conformation, in the form of ligand-independent dimers, that neutralizes the effects of the mutations. When ligands bind, these dimeric receptors are activated in a normal manner. This model suggests that unliganded dimers may be a common intermediate in receptor tyrosine kinase signaling.