Drosophila contain an insulin receptor homologue, encoded by the inr gene located at position 93E4-5 on the third chromosome. The receptor protein is strikingly homologous to the human receptor, exhibiting the same alpha2beta2 subunit structure and containing a ligand- activated tyrosine kinase in its cytoplasmic domain. Chemical mutagenesis was used to induce mutations in the inr gene and six independent mutations that lead to a loss of expression or function of the receptor protein were identified. These mutations are recessive, embryonic, or early larval lethals, but some alleles exhibit heteroallelic complementation to yield adults with a severe developmental delay (10 days), growth-deficiency, female-sterile phenotype. Interestingly, the severity of the mutant phenotype correlates with biochemical measures of loss of function of the receptor tyrosine kinase. The growth deficiency appears to be due to a reduction in cell number, suggesting a role for inr in regulation of cell proliferation during development. The phenotype is reminiscent of those seen in syndromes of insulin-resistance or IGF-I and IGF-I receptor deficiencies in higher organisms, suggesting a conserved function for this growth factor family in the regulation of growth and body size.