The epidermal growth factor (EGF) receptor is a transmembrane glycoprotein composed of a large extracellular ligand-binding region connected to the cytoplasmic kinase domain by a single transmembrane (TM) region. To explore the role of the TM region in the process of receptor activation, we have generated EGF-receptor mutants with altered TM regions by utilizing in vitro site-directed mutagenesis. The TM regions of two mutant receptors were either extended (designated i626-3) or shortened (designated d625.3) by three hydrophobic amino acid residues. In the other two mutant receptors, hydrophobic amino acids were substituted by charged residues--i.e., Val-627 was replaced by glutamic acid (designated V627E) or Leu-642 was replaced by an arginine residue (designated L642R). NIH 3T3 cells lacking endogenous EGF receptors were transfected with constructs encoding either wild-type or mutant receptors and shown to express the receptor molecules using 125I-labeled EGF binding and immunoprecipitation experiments. The mutant receptors were expressed on the cell surface as polypeptides of Mr 170,000 exhibiting typical high- and low-affinity binding sites for 125I-labeled EGF. Similar to its effect on wild-type receptors, phorbol 12-myristate 13-acetate abolished the mutant-receptor high-affinity binding sites for EGF. Moreover, EGF was able to stimulate the kinase activities of wild-type and mutant receptors both in vitro and in living cells. The mutant receptors were also able to undergo EGF-induced receptor dimerization as revealed by cross-linking experiments with a bifunctional covalent cross-linking agent. These results are compatible with an intermolecular allosteric oligomerization model for receptor activation rather than with a model based on an intramolecular mechanism for receptor activation.