In this report, we investigated the role of the C-terminal tail of the platelet-derived growth factor (PDGF) beta-receptor in the control of the receptor kinase activity. Using a panel of PDGF beta-receptor mutants with progressive C-terminal truncations, we observed that deletion of the last 46 residues, which contain a proline- and glutamic acid-rich motif, increased the autoactivation velocity in vitro and the V(max) of the phosphotransfer reaction, in the absence of ligand, as compared with wild-type receptors. By contrast, the kinase activity of mutant and wild-type receptors that were pre-activated by treatment with PDGF was comparable. Using a conformation-sensitive antibody, we found that truncated receptors presented an active conformation even in the absence of PDGF. A soluble peptide containing the Pro/Glu-rich motif specifically inhibited the PDGF beta-receptor kinase activity. Whereas deletion of this motif was not enough to confer ligand-independent transforming ability to the receptor, it dramatically enhanced the effect of the weakly activating D850N mutation in a focus formation assay. These findings indicate that allosteric inhibition of the PDGF beta-receptor by its C-terminal tail is one of the mechanisms involved in keeping the receptor inactive in the absence of ligand.