The binding of epidermal growth factor (EGF) to its cell surface receptor (EGF-R) results in a number of intracellular responses including the activation of the receptor intracellular tyrosine kinase. Receptor oligomerization induced by ligand binding has been suggested to play an important role in signal transduction. However, the mechanisms involved in oligomerization and signal transduction are poorly understood. We have produced and purified several milligrams of recombinant extracellular domain of the EGF receptor (EGF-Rx) using the baculovirus/insect cell expression system. The baculovirus-generated EGF-Rx is glycosylated, has had its signal peptide correctly cleaved, and exhibits a dissociation constant for EGF similar to that for solubilized full-length receptor, of about 100 nM. The binding of EGF to EGF-Rx leads to the formation of receptor dimers and higher oligomerization states which are irreversibly captured using the covalent cross-linking agent disuccinimidyl suberate. Interestingly, purified receptor monomers and dimers, stabilized by the cross-linker in the presence of EGF, exhibit increased binding affinity toward EGF as compared with receptor monomers which have not been exposed to EGF. It appears that the high affinity state of receptor can be maintained by the covalent cross-linking agent. These results indicate that in addition to ligand binding, the extracellular domain of EGF receptor possesses the inherent ability to undergo ligand-induced dimerization and that the low affinity state is converted to a high affinity state by EGF.