In this study, we found that adding iodoacetamide to the homogenization buffer used in the preparation of mouse or rat liver plasma membranes resulted in an increase of insulin receptor autophosphorylation by 4-5-fold and receptor kinase activity by about 2-fold. Similar effects were obtained with iodoacetate and p-chloromercuriphenyl sulfonate. The effect of iodoacetamide was minimal when it was added to membranes prepared without the thiol reagent. The enhancing effect of iodoacetamide on insulin receptor autophosphorylation was the result of a more than 2-fold decrease in the Km and a more than 3-fold increase in Vmax for ATP. The presence of iodoacetamide in the preparation of plasma membranes also greatly increased the solubilization of the insulin receptor from the plasma membrane by Triton X-100. We propose that iodoacetamide acts to alkylate some unknown thiols released during tissue homogenization and that in its absence these thiols formed mixed disulfides with the insulin receptor, thus adversely affecting the process of receptor activation by insulin.