The human insulinlike growth factor 1 (hIGF-1) receptor (hIGFR) is a transmembrane protein tyrosine kinase (PTK) molecule which shares high sequence homology in the PTK domain with the insulin receptor and, to a lesser degree, the ros transforming protein of avian sarcoma virus UR2. To assess the transforming potential of hIGFR, we introduced the intact and altered hIGFR into chicken embryo fibroblasts (CEF). The full-length hIGFR cDNA (fIGFR) was cloned into a UR2 retroviral vector, replacing the original oncogene v-ros. fIGFR was able to promote the growth of CEF in soft agar and cause morphological alteration in the absence of added hIGF-1 to medium containing 11% calf and 1% chicken serum. The transforming ability of hIGFR was not further increased in the presence of 10 nM exogenous hIGF-1. The 180-kDa protein precursor of hIGFR was synthesized and processed into alpha and beta subunits. The overexpressed hIGFR in CEF bound hIGF-1 with high affinity (Kd = 5.4 x 10(-9) M) and responded to ligand stimulation with increased tyrosine autophosphorylation. The cDNA sequence coding for part of the beta subunit of hIGFR, including 36 amino acids of the extracellular domain and the entire transmembrane and cytoplasmic domains, was fused to the 5' portion of the gag gene in the UR2 vector to form an avian retrovirus. The resulting virus, named UIGFR, was able to induce morphological transformation and promote colony formation of CEF with a stronger potency than did fIGFR. The UIGFR genome encodes a membrane-associated, glycosylated gag-IGFR fusion protein. The specific tyrosine phosphorylation of the mature form of the fusion protein, P75, is sixfold higher in vitro and threefold higher in vivo than that of the native IGFR beta subunit, P95. In conclusion, overexpression of the native or an altered hIGFR can induce transformation of CEF with the gag-IGFR fusion protein possessing enhanced transforming potential, which is consistent with its increased in vitro and in vivo tyrosine phosphorylation.