Wild-type and mutant human transferrin receptors have been expressed in chicken embryo fibroblasts using a helper-independent retroviral vector. The internalization of mutant human transferrin receptors, in which all but four of the 61 amino acids of the cytoplasmic domain had been deleted, was greatly impaired. However, when expressed at high levels, such "tailless" mutant receptors could provide chicken embryo fibroblasts with sufficient iron from diferric human transferrin to support a normal rate of growth. As the rate of recycling of the mutant receptors was not significantly different from wild-type receptors, an estimate of relative internalization rates could be obtained from the distribution of receptors inside the cell and on the cell surface under steady-state conditions. This analysis and the results of iron uptake studies both indicate that the efficiency of internalization of tailless mutant receptors is approximately 10% that of wild-type receptors. Further studies of a series of mutant receptors with different regions of the cytoplasmic domain deleted suggested that residues within a 10-amino acid region (amino acids 19-28) of the human transferrin receptor cytoplasmic domain are required for efficient endocytosis. Insertion of this region into the cytoplasmic domain of the tailless mutant receptors restored high efficiency endocytosis. The only tyrosine residue (Tyr 20) in the cytoplasmic domain of the human transferrin receptor is found within this 10-amino acid region. A mutant receptor containing glycine instead of tyrosine at position 20 was estimated to be approximately 20% as active as the wild-type receptor. We conclude that the cytoplasmic domain of the transferrin receptor contains a specific signal sequence located within amino acid residues 19-28 that determines high efficiency endocytosis. Further, Tyr 20 is an important element of that sequence.