The functional properties of carboxyl terminally truncated mutants of the platelet-derived growth factor beta-receptor were compared with those of the wild-type receptor and a receptor mutant made kinase negative by a point mutation. A mutant in which 98 amino acids were deleted retained kinase activity and mediated a mitogenic signal, whereas deletion of 141 or 155 amino acids led to loss of kinase activity and ability to mediate a mitogenic signal. The mutant with 155 amino acids deleted, i.e. the entire carboxyl-terminal tail downstream of the kinase domain, did not undergo ligand-mediated internalization and down-regulation, whereas the mutant with 141 amino acids deleted was internalized at a relatively high rate. This indicates that the 14 amino acids immediately downstream of the kinase domain is of importance for the internalization of the platelet-derived growth factor beta-receptor. This region is hydrophobic and shares no similarity to other sequences postulated to mediate endocytotic signals.