Protein tyrosine kinase activity found in the beta-subunit of the insulin receptor provides a mechanism by which insulin binding on the outside of the cell transmits its signal across the plasma membrane into the cytosol. The autophosphorylation of the insulin receptor on tyrosyl residues activates the intrinsic tyrosine kinase of the receptor, rendering its ligand independent. Evidence suggests that phosphorylation of tyrosyl residues 1146, 1150, and 1151 in the kinase domain of the beta-subunit play a role in activation. Point mutations in the cytoplasmic portion of the beta-subunit confirm the above suggestions and indicate that additional sites are important for receptor function. We present methodology for overproducing the cytoplasmic domain of the receptor in the Baculovirus expression system. The protein, produced in insect cells and larvae, is soluble and fully active on autophosphorylation. Like the intact receptor, its autophosphorylation is intramolecular. Because greater than or equal to 10 mg of pure protein can be isolated from 10(10) insect cells infected with the recombinant Baculovirus encoding the human insulin-receptor kinase domain, sufficient enzyme is available for various studies, including physicochemical analysis. Isolation of beta-subunit defects found in the receptors of patients with various forms of diabetes mellitus also implicates the insulin-receptor kinase in insulin action. Finally, a potential model system for the genetic analysis of the insulin-insulin-receptor system with Drosophila melanogaster is noted. Conservation of the deduced amino acid sequence for both alpha- and beta-subunit sequences between humans and insects highlights the significance of this manner of signal transduction throughout nearly 1 billion years of evolution.