The major site of epidermal growth factor receptor (EGF-R) serine phosphorylation is located within the COOH-terminal domain of the receptor at Ser1046/7. We have previously demonstrated that this phosphorylation site accounts for the acute desensitization of the EGF-R observed in EGF-treated cells. Here we show that the mutational removal of this negative regulatory phosphorylation site causes potentiation of signal transduction by the EGF-R. This potentiation can be accounted for in part by a block in the EGF-stimulated down-regulation of the EGF-R. These data indicate that the SER1046/7 phosphorylation site may have a regulatory role during long term incubation of cells with mitogenic concentrations of EGF.