Insulin and the insulin-like growth factors IGF-1 and IGF-II are found in all vertebrates, and these anabolic peptides share primary and tertiary structural features which suggest that they have evolved from a common ancestral gene. We have proposed that an insulin-like peptide (ILP) cDNA recently cloned from the protochodate amphioxus may represent the ancestral gene in that the deduced sequence of ILP contains features of both insulin and IGF, and it evidently represents a hybrid insulin/IGF molecule. To expand this hypothesis we have cloned the cDNA that encodes the cognate receptor from amphioxus. Primary sequence comparisons show that the ILP receptor is a member of the insulin receptor family, which in mammals includes the insulin receptor (IR), type I IGF receptor (IGF-IR), and IR-related receptor (IRR). In overall amino acid sequence, the ILP receptor is 48.6% identical to the human (h)IR, 47.3% identical to hIGF-IR, and 43.7% identical to hIRR, and this contrasts with the finding that hIR and hIGF-IR share 57.6% identity. Using degenerate oligonucleotide primers, we show by RT-PCR that amphioxus contains only a single member of the insulin receptor gene family. To complement the sequence comparison, we expressed the ILP receptor protein by transfecting the cDNA into 293 cells. Autophosphorylation of the expressed ILP receptor was half-maximally stimulated by a synthetic ILP analog, (B1-Thr)ILP, at a concentration of about 5 x 10(-7) M. Interestingly, autophosphorylation of the ILP receptor was also stimulated by incubation with either mammalian insulin or IGF-I, although equally high concentrations (10(-5) M) of each were required. Based on these results, we propose that, analogously to the ILP gene, the ancestral ILP receptor gene also duplicated and diverged to generate the IR and IGF-IR genes during the evolutionary transition from protochordates to vertebrates. Our results also indicate that the amphioxus ILP receptor contains the basic structural determinants that are necessary for binding and activation by mammalian insulin and IGF-I.