The human fibroblast interleukin 1 (IL-1) receptor is a glycosylated transmembrane protein with a cytoplasmic domain of 213 amino acids. We have constructed a series of deletion mutants of the cytoplasmic region of the IL 1 receptor and have used these mutants to examine its role in ligand binding, internalization, signal transduction, and nuclear localization of IL-1. Mutant receptors lacking most of the cytoplasmic domain are expressed at the cell surface and can bind, internalize, and localize IL-1 at the nucleus, but they do not allow IL-1-mediated induction of interleukin 2 and SV40 promoters. We have localized a critical region for signal transduction to a 50-amino acid segment of the cytoplasmic domain of the receptor. These studies demonstrate that IL-1 internalization and nuclear localization are not sufficient to trigger IL-1 activation of gene expression in T-cells.