Agrin is thought to be the nerve-derived factor that initiates acetylcholine receptor (AChR) clustering at the developing neuromuscularjunction. We have investigated the signaling pathway in mouse C2 myotubes and report that agrin induces a rapid but transient tyrosine phosphorylation of the AChR beta subunit. As the beta-subunit tyrosine phosphorylation occurs before the formation of AChR clusters, it may serve as a precursor step in the clustering mechanism. Consistent with this, we observed that tyrosine phosphorylation of the beta subunit correlated precisely with the presence or absence of clustering under several experimental conditions. Moreover, two tyrosine kinase inhibitors, herbimycin and staurosporine, that blocked beta-subunit phosphorylation also blocked agrin-induced clustering. Surprisingly, the inhibitors also dispersed preformed AChR clusters, suggesting that the tyrosine phosphorylation of other proteins may be required for the maintenance of receptor clusters. These findings indicate that in mammalian muscle, agrin-induced AChR clustering occurs through a mechanism that requires tyrosine phosphorylation and may involve tyrosine phosphorylation of the AChR itself.