We have identified an amino acid sequence within the E peptide of the insulin-like growth factor IB (IGF-IB) precursor that is biologically active and designated this peptide insulin-like growth factor IB-(103-124) E1 amide (IBEl). Its existence was predicted by a flanking Gly-Lys-LysLys, a signal sequence for sequential proteolytic cleavage and peptidyl C-terminal amidation. A synthetic analog of the predicted IBE, peptide, designated Y-23-R-NH2, was generated with tyrosine added at position 0. This peptide at 2-20 nM had growth-promoting effects on both normal and malignant human bronchial epithelial cells. Y-23-R-NH2 bound to specific high-affinity receptors (Kd = 2.8 ± 1.4 x 10-11 M) present at 1-2 x 104 binding sites per cell. Ligand binding was not inhibited by recombinant insulin or recombinant IGF-I. Furthermore, a monoclonal antibody antagonist to the IGF-I receptor (aIR3) did not suppress the proliferative response induced by Y-23-R-NH2. In addition, C-terminal amidation was shown to be important in receptor recognition since the free-acid analog of IBE1 (Y-23-R-OH) did not effectively compete for binding and was not a potent agonist of proliferation. Immunoblot analysis of human lung tumor cell line extracts using an antibody raised against Y-23-R-NH2 detected a low molecular mass band of -5 kDa, implying that a protein product is produced that has immunological similarity to IBE1.Extracts of human, mammalian, and avian livers analyzed on an immunoblot with the anti-Y-23-R-NH2 antibody contained proteins of :21 kDa that were specifically recognized by the antiserum and presumably represent an IGF-I precursor molecule. This implies that in species where an IGF-I mRNA with homology to the human IGF-IB E domain has not yet been described, an alternate mRNA must be produced that contains a sequence similar to that of the midportion of the human IGF-IB E domain. Our rmdings demonstrate that IBE1 is a growth factor that mediates its effect through a specific highaffinity receptor and is most likely conserved in many species.