Chronic treatment of 3T3-C2 fibroblasts with insulin causes the slow (t1/2 = 3-4 h) down-regulation of cellular insulin receptor to a new steady state level by accelerating receptor decay (Knutson, V.P., Ronnett, G.V., and Lane, M.D. (1982) Proc. Natl. Acad. Sci. U.S.A. 79, 2822-2826). In the present investigation, the synthesis and turnover of the receptor during the transition to the down-regulated state was examined by the heavy isotope density-shift method. It was observed that within two h after insulin addition, receptor decay increased abruptly for several hours then gradually declined until the "down-regulated" rate was achieved. The abrupt increase in receptor decay induced by insulin was preceded by a more rapid (t1/2 less than or equal to 10 min) translocation of cell surface receptor to an "intracellular" trypsin-resistant compartment. Thus, upon exposure to ligand, insulin receptor rapidly redistributes from the cell surface to an intracellular compartment, without an initial net loss of cellular receptors. The translocation process was rapidly reversed (t1/2 less than or equal to 20 min) upon removal of insulin. With prolonged exposure to insulin, the initial rapid translocation of receptor was followed by a slower inactivation of receptor apparently in the intracellular compartment. Cycloheximide, which lengthens receptor half-life by blocking a step in receptor inactivation, had no effect on receptor internalization. Internalization of insulin receptor and its bound ligand were, however, rapidly (less than 10 min) blocked by phenylarsine oxide. These results support the following sequence of events. Upon exposure to ligand, insulin receptors are translocated from the cell surface to an intracellular site which results in accelerated receptor decay and ultimately to a lower steady state cellular receptor level.