We have studied the structure and function of the insulin receptor in a patient (PK) with severe insulin resistance and Rabson-Mendenhall syndrome. Insulin binding to cultured fibroblasts from PK was almost not detectable and insulin-induced insulin receptor autophosphorylation and glucose uptake was abolished. The structure of the receptor gene was analysed by sequencing amplified products of the 22 exons with the flanking intron regions directly as well as after subcloning in pUCBM20 plasmids. Two mutant alleles of the insulin receptor gene were detected. One allele contains in-frame 12 additional base pairs in exon 3 coding for the amino acids Leu-His-Leu-Val located between Asp-261 and Leu-262 in the receptor's extracellular domain, being the first report of an insertion mutation of the insulin receptor gene. In the other allele Arg-86 in exon 2 is changed into a stop codon. Therefore, PK is compound heterozygous at the insulin receptor locus. Direct cDNA sequencing indicates that both mutant alleles are expressed in the patient's fibroblasts. Studies of the parents' fibroblasts revealed that PK inherited the insertion mutation from the father and the nonsense mutation from the mother. Insulin binding to fibroblasts of the mother was reduced (63% of control cells) and hormone binding to the father's cells shows a larger reduction (37% of control cells), but less severe than the patient's cells (11% of control). This investigation provides further evidence that the Rabson-Mendenhall syndrome is causally related to mutations in the insulin receptor gene.