The human transferrin receptor is post-translationally modified by the addition of a fatty acyl moiety. In earlier studies, transient expression in Cos cells of human transferrin receptors in which Cys62 or Cys67 was altered to serine provided evidence that Cys62 is the major acylation site of the receptor (Jing, S., and Trowbridge, I. S. (1987) EMBO J. 6, 327-331). To determine whether acylation of the receptor is required for high efficiency endocytosis and iron uptake, wild type and mutant human transferrin receptors have been stably expressed in chick embryo fibroblasts using a helper-independent retroviral vector. In marked contrast to Cos cells, both Cys62 and Cys67 of the wild type human transferrin receptor were acylated in chick embryo fibroblasts. Moreover, their modification to serine did not abolish palmitate labeling, implying that one or both of these serine residues could serve as alternative lipid attachment sites in these cells. The relative labeling of mutant receptors with palmitate and the susceptibility of their lipid moieties to cleavage by hydroxylamine were consistent with Ser67 but not Ser62 serving as a lipid attachment site. Consequently, to obtain human transferrin receptors lacking covalently bound lipid in the chick embryo fibroblasts, it was necessary to alter Cys62 and Cys67 to alanine. Functional studies indicated that these non-acylated mutant receptors were internalized efficiently and mediated iron uptake from human transferrin at a similar rate to that of wild type receptors. We conclude, therefore, that acylation of the human transferrin receptor is not essential for endocytosis and recycling.