The mechanism of action of AG1296, a potent and specific inhibitor of the platelet-derived growth factor (PDGF) receptor tyrosine kinase [Kovalenko, M., Gazit, A., Böhmer, A., Rorsman, Ch., Rönnstrand, L., Heldin, C.-H., Waltenberger, J., Böhmer, F. D., & Levitzki, A. (1994) Cancer Res. 54, 6106-6114] was investigated. This quinoxalin-type tyrphostin neither interferes with PDGF-BB binding to the PDGF beta-receptor nor has any effect on receptor dimerization. Kinetic analysis of the inhibition was carried out using a synthetic peptide substrate (KY751) corresponding to the sequence around tyrosine 751 autophosphorylation site of the PDGF receptor. It revealed purely competitive inhibition vis-à-vis ATP, mixed competitive inhibition vis-a-vis the peptide substrate for the non-activated receptor, and mixed competitive inhibition vis-à-vis both substrates for the activated receptor. Thus, the type of inhibition apparently changes upon receptor activation, indicating conformational changes at the ATP-binding site. The high degree of selectivity for the tyrphostin AG1296 might result from the complex type of interaction with the active center of the receptor as revealed by the kinetic analysis. Dose-response curves for inhibition of the phosphorylation of individual autophosphorylation sites of the PDGF beta-receptor by AG1296 were different, phosphorylation of tyrosine 857 being the most susceptible to inhibition. Thus, phosphorylation of tyrosine 857 in the PDGF receptor kinase domain seems dispensable for partial kinase activation. The findings are discussed in relation to current models of receptor tyrosine kinase activation.