To investigate the cooperativity of insulin's structure, a cavity-forming substitution was introduced within the hydrophobic core of an engineered monomer. The substitution, Ile(A2)-->Ala in the A1-A8 alpha-helix, does not impair disulfide pairing between chains. In accord with past studies of cavity-forming mutations in globular proteins, a decrement was observed in thermodynamic stability (DeltaDeltaG(u) 0.4-1.2 kcal/mole). Unexpectedly, CD studies indicate an attenuated alpha-helix content, which is assigned by NMR spectroscopy to selective destabilization of the A1-A8 segment. The analog's solution structure is otherwise similar to that of native insulin, including the B chain's supersecondary structure and a major portion of the hydrophobic core. Our results show that (1) a cavity-forming mutation in a globular protein can lead to segmental unfolding, (2) tertiary packing of Ile(A2), a residue of low helical propensity, stabilizes the A1-A8 alpha-helix, and (3) folding of this segment is not required for native disulfide pairing or overall structure. We discuss these results in relation to a hierarchical pathway of protein folding and misfolding. The Ala(A2) analog's low biological activity (0.5% relative to the parent monomer) highlights the importance of the A1-A8 alpha-helix in receptor recognition.