EGF was used to stimulate a chimeric receptor consisting of the epidermal growth factor receptor (EGFR) extracellular, transmembrane, and protein kinase C-substrate domains linked to the intracellular tyrosine kinase and carboxyl terminal domains of the rat neu protein in NIH/3T3 cells. EGF-induced rapid and delayed morphological changes consisted of membrane ruffling, increased pinocytosis, extension of lamellar actin-containing footpads at the cell periphery and partial reorganization of the actin stress fibers in the cells. EGF bound to the cells was rapidly internalized in a complex with the EGFR/neu protein, as shown by loss of EGF binding and EGFR antigens from the cell surface. The movement of the EGFR/neu protein was followed with indirect immunofluorescence into a vesicular intracellular compartment using antibodies against both EGFR and neu protein domains. Metabolic labeling and pulse-chase experiments indicated that the receptor was degraded soon after its internalization. EGF treatment also induced the junB transcription factor mRNA and a dose-dependent stimulation of DNA synthesis in cultures expressing the chimeric receptor. The tumor promoter TPA led to a transient loss of cell surface receptors and prevented EGF stimulation of DNA synthesis but did not completely abolish junB mRNA induction or increase degradation of the chimeric receptor. These results show that the chimeric EGFR/neu receptor undergoes typical downregulation upon ligand binding and TPA pretreatment and is capable of transducing an EGF-induced mitogenic signal.