Treatment of the soluble insulin receptor from human placenta with 1.25 mM dithiothreitol and 75 mM Tris at pH 8.5 results in complete reduction of interhalf disulfide bonds (class 1 disulfides) and dissociation of the tetrameric receptor into the dimeric alpha beta form. The alpha beta receptor halves exhibit a reduced affinity for insulin binding (Böni-Schnetzler, M., Rubin, J. B., and Pilch, P. F. (1986) J. Biol. Chem. 261, 15281-15287). Kinetic experiments reveal that reduction of class 1 disulfides is a faster process than the loss of affinity for ligand, indicating that events subsequent to reduction of interhalf disulfides are responsible for the affinity change. We show that a third class of alpha subunit intrachain disulfides is more susceptible to reduction at pH 7.6 than at pH 8.5 and appears to form part of the ligand binding domain. Reduction of the intrachain disulfide bonds in this part of the alpha subunit leads to a loss of insulin binding. Modification of this putative binding domain by dithiothreitol can be minimized if reduction is carried out at pH 8.5. When the insulin receptor in placental membranes is reduced at pH 8.5, the receptor's affinity for insulin is not changed when binding is measured in the membrane. However, the Kd for insulin binding is reduced 10-fold when alpha beta receptor halves are subsequently solubilized. Scatchard analysis of insulin binding to reduced or intact receptors in the membrane and in soluble form together with sucrose density gradient analysis of soluble receptors suggests that alpha beta receptor halves remain associated in the membrane after reduction, but they are dissociated upon solubilization. We interpret these results to mean that the association of two ligand binding domains, 2 alpha beta receptor halves, is required for the formation of an insulin receptor with high affinity for ligand.