The receptor for hepatocyte growth factor/scatter factor (HGF/SF) is an alpha beta tyrosine kinase of 190 kDa which mediates growth and motility in several cell types. We have previously shown that tyrosine autophosphorylation enhances the receptor kinase activity, while serine phosphorylation by protein kinase C or other Ca(2+)-dependent kinase(s) is inhibitory. We now identify Ser985 as the major phosphorylation site for the protein kinases responsible for such inhibition. Both phorbol esters or Ca2+ ionophore treatment induces phosphorylation of the same tryptic phosphopeptide corresponding to the sequence Leu983-Arg987 located in the juxta-membrane domain of the receptor beta chain. Purified protein kinase C phosphorylates in vitro a synthetic peptide (V14S) including Ser985. Trypsin digestion of the phosphorylated V14S generates a single phosphopeptide comigrating in reverse-phase high performance liquid chromatography with the tryptic peptide phosphorylated in vivo. Phorbol ester treatment of cultured cells inhibits the ligand-induced tyrosine autophosphorylation of the receptor. In vitro, Ser985 phosphorylation inhibits the receptor tyrosine kinase activity on exogenous substrates. Substitution of Ser985 by site-directed mutagenesis results in increased tyrosine phosphorylation of the receptor and abolishes down-modulation by protein kinase C. These data show that phosphorylation of Ser985 is a key mechanism for the negative regulation of HGF/SF receptor.