Staurosporine is a potent microbial inhibitor of a number of protein kinases, including protein kinase C, cyclic AMP-dependent kinase, and the tyrosine kinase pp60src. We have used staurosporine to investigate the role of phosphorylation in the regulation of the epidermal growth factor (EGF) receptor in both human epidermal carcinoma A431 cells and mouse Swiss 3T3 fibroblasts. We report here that staurosporine treatment causes enhancement in high affinity EGF binding and a decrease in the phosphorylation state of the unstimulated receptor at a number of residues, including threonine 669. Staurosporine also antagonizes the inhibition of high affinity EGF binding and the increase in phosphorylation state of the unstimulated EGF receptor by phorbol esters and the calcium ionophore A23187. Staurosporine is an effective inhibitor of the EGF-stimulated receptor tyrosine kinase in vitro and thus does not enhance EGF stimulation of EGF receptor autophosphorylation in vivo. These results suggest that phosphorylation plays a major role in the regulation of the high affinity binding state of the EGF receptor in both unstimulated and mitogenically activated cells.