Peptides from the alpha 1 region (residues 61-85) of the D and K molecules of the major histocompatibility complex class I antigens inhibit insulin-induced tyrosine kinase activity of the purified human insulin receptors (IRs) as measured both by autophosphorylation and IR-mediated substrate [poly(Glu,Tyr)] phosphorylation. Half-maximal effect of the Dk-(61-85) peptide on IR autophosphorylation is obtained at 1.2 microM, and almost complete inhibition of IR kinase activity is obtained at 10 microM peptide. The corresponding K kappa-(61-85) peptide has a significantly weaker effect on autophosphorylation. No such effects are observed with nine peptides of similar length, but unrelated to major histocompatibility complex class I antigens. Neither of the major histocompatibility complex class I-derived peptides has any effect on the constitutively active kinase of a genetically engineered cytoplasmic IR domain. Further, insulin binding to IR is unaltered in the presence of the major histocompatibility complex class I-derived peptides. The inhibitory activity of the peptides on insulin-induced IR phosphorylation facilitated the observation that IRs require insulin to become substrate for an independent tyrosine kinase. In the presence of an inhibitory peptide, the constitutively active cytoplasmic IR kinase domain only phosphorylates the intact IR in the presence of insulin. We conclude that the tyrosine kinase activity of IRs may be altered by peptide interaction at an allosteric site and, moreover, IRs require insulin to assume a conformation permitting phosphorylation by an independent kinase.