A chimeric receptor consisting of an epidermal growth factor (EGF) receptor ligand-binding domain and platelet-derived growth factor (PDGF) receptor transmembrane and cytoplasmic signalling domains has been constructed and shown to be fully functional in phosphorylation, mitogenesis, transformation, Ca2+ release, and pH change assays. Expression of this receptor in EGF receptor-deficient, PDGF-responsive NIH 3T3 cells allows the activation of PDGF signalling pathways by EGF. This system was used to examine the function of kinase insertion sequences (KIS). While a mutant with a KIS deletion of 83 amino acids displayed a significant but reduced ability to induce mitogenic, transforming, and Ca2+ release responses in transfected cells, deletion of 20 additional amino acids resulted in abolishment of such activities. This differential loss of signalling potential correlated with the reduced or abolished potential of these receptor mutants to phosphorylate cellular substrates such as PLC gamma. Our results suggest an integral role for KIS in PDGF receptor cytoplasmic domain conformation and an involvement in substrate interaction, but provide no evidence for an exclusive role of KIS in the mediation of biological signals.