We have observed dephosphorylation of the soluble, 48 kDa insulin receptor tyrosine kinase domain following its tyrosine autophosphorylation. Dephosphorylation was associated with generation of inorganic phosphate, thereby making catalysis by reversal of the kinase reaction unlikely. The kinase domain preparations could not be shown to contain detectable, contaminating protein tyrosine phosphatase activity. In addition, dephosphorylation was insensitive to protein phosphatase inhibitors. However, it was blocked by the kinase inhibitor staurosporine. These results are consistent with insulin receptor kinase domain auto-dephosphorylation via catalysis involving the kinase itself. These findings raise the possibility of a novel mechanism for termination of the insulin receptor signal.