Although insulin-like growth factor I(IGF-I) is a mitogenic growth factor, its role in tumorigenesis is unclear. We therefore transfected wild-type and truncated beta-subunit mutant ((STOP)-S-952) human IGF-I receptor cDNAs into Rat-1 fibroblasts. Rat-1 transfectants expressed 2.5- to 7-fold increased IGF-I receptor mass, while the K-d for IGF-I binding was unchanged. The Rat-1 cells transfected with wild-type receptor cDNA responded to in vitro IGF-I treatment by increased proliferation and DNA synthesis. Cells overexpressing wild-type receptors were also transformed as evidenced by ligand-dependent colony proliferation in soft agar. After injection into athymic nude mice, al! wild-type transfectants formed solid sarcomas within 3 weeks, and ex vivo tumor cell assays confirmed continued overexpression of human IGF-I receptors. In contrast, both DNA synthesis and proliferation of (STOP)-S-952-transfected cells were attenuated below that of untransfected cells. (STOP)-S-952 cells were nonresponsive to IGF-I in vitro and were unable to sustain anchorage-independent growth. No tumors were induced for up to 8 weeks after injection of (STOP)-S-952 transfectants into athymic mice, despite the presence of demonstrable endogenous IGF-I recep tors on the (STOP)-S-952-transfected cells. Therefore, (STOP)-S-952 behaves as a dominant negative inhibitor of endogenous IGF-I receptor function, probably by assembling nonfunctional hybrid rat/mutant human receptor tetramers.