Transforming growth factor-alpha (TGF-alpha) is a growth-promoting protein that binds to the epidermal growth factor (EGF) receptor. To identify critical residues that govern TGF-alpha-EGF receptor binding, we prepared site-specific substitution mutants of TGF-alpha. Mutant proteins were tested in receptor-binding and mitogenesis assays. Semiconservative substitutions at positions 4, 12, 18, and 45 decreased biological activity 2.1- to 14-fold. The conservative substitution of lysine for arginine at position 42 completely eliminated biological activity. Amino acid composition analysis of proteolytic fragments from TGF-alpha and the Lys-42 mutant indicated that these proteins contained the same disulfide bonds. These studies suggest that arginine 42 may be a contact point for TGF-alpha-EGF receptor interaction.