The EGF-receptor (EGF-R) is a transmembrane glycoprotein with intrinsic protein tyrosine kinase (TK) activity. To explore the importance of the receptor TK in the action of EGF, we have used transfected NIH-3T3 cells expressing either the normal human EGF-R or a receptor mutated at Lys721, a key residue in the presumed ATP-binding region. The wild-type receptor responds to EGF by causing inositol phosphate formation, Ca2+ influx, activation of Na+/H+ exchange and DNA synthesis. In contrast, the TK-deficient mutant receptor fails to evoke any of these responses. It is concluded that activation of the receptor TK is a crucial signal that initiates the multiple post-receptor effects of EGF leading to DNA synthesis. Furthermore, the results suggest that tyrosine phosphorylation plays a role in the activation of the phosphoinositide signalling system.