Kinetic experiments were performed to determine the effects of insulin receptor occupancy on insulin binding. The following results were obtained: (a) the rate constant (k1) for uptake of 125I-insulin by liver plasma membranes was 2 X 10(6) M-1 s-1 and invariant at applied hormone concentrations of 7.5 to 100 X 10(-11) M. 125I-Insulin dissociated from membranes in a biphasic manner with rapid (k-1 = 2-4 X 10(-3) s-1) and slow (k-1 = 2-3 X 10(-4) s-1) components of release when dissociation was initiated by dilution into excess medium. Under all dissociation conditions employed, 125I-insulin was the radioactive species bound to and released from membranes. (b) Native insulin (100 nM) or 131I-insulin (5 nM) in the dissociation medium enhanced the dilution-induced dissociation of bound 125I-insulin. In the latter experiment, total receptor occupancy (bound 125I-insulin and 131I-insulin) decreased during dissociation. The enhanced dissociation effect was therefore not necessarily due to increased site occupancy. (c) As association time prior to dissociation was increased, the dissociability of bound 125I-insulin diminished. Decreased dissociability resulted from an increase in the slow component of hormone release at the expense of the rapid component. 131I-insulin was bound to membranes to which 125I-insulin had been prebound. The dissociation of 131I-insulin had been prebound. The dissociation of 131I-insulin was unaffected by the presence of 125I-insulin dissociating at either rapid or slow rates. The data suggest that there are no cooperative interactions between binding sites and that the hormone-receptor complex converts to a higher affinity state subsequent to occupancy since KD = k-1/k1 and K-1 decreased. A two-state model for the hepatic insulin receptor is proposed.