The hypothesis that extracellular truncation of the common receptor subunit for interleukin-3 (IL-3), granulocyte-macrophage colony-stimulating factor, and IL-5 (h beta c) can lead to ligand-independent activation was tested by infecting factor-dependent hematopoietic cell lines with retroviruses encoding truncated forms of h beta c. A truncation, resembling that in v-Mpl, and retaining 45 h beta c-derived extracellular residues, led to constitutive activation in the murine myeloid cell line, FDC-P1. However, infection of cells with retrovirus encoding a more severely truncated receptor, retaining only 7 h beta c-derived extracellular residues, did not confer factor independence on these cells. These experiments show that truncation activates the receptor and define a 37-amino acid segment of h beta c (H395-A431) which contains two motifs conserved throughout the cytokine receptor superfamily (consensus Y/H XX R/Q VR and WSXWS), as essential for factor-independent signaling. The mechanism of activation was also investigated in less severe truncations. A receptor that retains the entire membrane-proximal domain (domain 4) also conferred factor independent growth on FDC-P1 cells; however, a retrovirus encoding a truncated form of h beta c having two intact membrane proximal domains did not have this ability, suggesting that domain 3 may have an inhibitory role in h beta c. The ability of these receptors to confer factor independence was cell specific as demonstrated by their inability to confer factor-independent growth when introduced into the murine IL-3-dependent pro-B cell line BaF-B03. These results are consistent with a model in which activation requires unmasking of an interactive receptor surface in domain 4 and association with a myeloid-specific receptor or accessory component. We suggest that in the absence of ligand intramolecular interactions prevent inappropriate signaling.