We analyzed the kinetics and thermodynamics of 125I-nerve growth factor (125I-NGF) binding to NGF-receptor on PC12 cells. We used conditions of pseudo-first order kinetics and techniques to quantitate internalized complexes, "slow" or high affinity binding complexes, and cell surface "fast" or low affinity complexes. Two possible models were examined: binding to two independent receptors at the cell surface (i.e. high and low affinity forms of NGF-receptor) and a model for consecutive formation of fast, low affinity binding followed by slow, high affinity binding or internalization. Our data are consistent with the consecutive model only. The rates of association and dissociation of NGF with slow, high affinity sites and internalized, acid wash-resistant sites are indistinguishable from each other. We also analyzed, in detail, the two assays primarily used to distinguish slow binding complexes from internalized complexes. Scatchard analysis of total binding and dissociation of pre-equilibrated 125I-NGF in the presence of unlabeled NGF at high concentration (cold wash). Neither of these assays shows any evidence that the slow, high affinity binding step is different from internalization of the 125I-NGF-receptor complex. Based on this analysis, there are only two detectable forms of NGF-receptor on PC12 cells: complexes on the surface of the cells with a binding affinity of 0.5 nM at 37 degrees C and complexes internalized by the cells. Furthermore, the data are consistent with a model in which NGF-receptor is internalized constitutively and independently of occupancy by NGF. We also examined the fate of internalized 125I-NGF. In the first 60 min after contact with PC12 cells, no degradation of 125I-NGF was observed. Moreover, a significant amount of 125I-NGF recirculates to the cell surface and is released as intact, Mr = 13,000 NGF. The cells were also stimulated by NGF in a primary neurite outgrowth assay with an ED50 of 2-16 pM under conditions of low initial cell numbers in a large extracellular volume of NGF-containing medium. Thus, low level occupancy of the cell surface receptors, Kd = 0.5 nM, for several days is sufficient to stimulate neurite outgrowth. This indicates the presence of spare NGF-receptors on the surface PC12 cells.