Occupancy-induced down-regulation of cell surface epidermal growth factor (EGF) receptors attenuates signal transduction. To define mechanisms through which down-regulation of this class of growth factor receptors occurs, we have investigated the relative roles of ligand-induced internalization and recycling in this process. Occupied, kinase-active EGF receptors were internalized through a high affinity, saturable endocytic system at rates up to 10-fold faster than empty receptors. In contrast, full length EGF receptors lacking tyrosine kinase activity underwent internalization at a rate independent of occupancy. This "kinase-independent" internalization rate appeared to reflect constitutive receptor internalization since it was similar to the internalization rate of both receptors lacking a cytoplasmic domain and of antibodies bound to empty receptors. EGF internalized by either kinase-active or kinase-inactive receptors was efficiently recycled and was found within endosomes containing recycling transferrin receptors. However, targeting of internalized receptors to lysosomes did not require receptor kinase activity. All receptors that displayed ligand-induced internalization also underwent down-regulation, indicating that the proximal cause of down-regulation is occupancy-induced endocytosis. Tyrosine kinase activity greatly enhances this process by stabilizing receptor association with the endocytic apparatus.