The effect of incubation with insulin on insulin-receptor internalization by erythrocyte ghosts was investigated. The number of surface insulin receptors decreased by 30-40% after incubation of ghosts with insulin. Total insulin-receptor binding to solubilized ghosts was the same in insulin-incubated and control ghosts, whereas insulin binding to an internal vesicular fraction was substantially increased in insulin-incubated ghosts. Our findings suggest that erythrocyte-ghost insulin receptors are internalized to a vesicular compartment in response to incubation with insulin.