The effects of cationic polyamino acids on insulin binding to soluble insulin receptor preparations were studied. Incubation of partially or fully purified receptor preparations with polylysine (pLys) increased by several-fold the amount of [125I]insulin that remained associated with the receptor, as determined both by precipitation of receptor-insulin complexes by polyethylene glycol or by separation of the complexes from the free hormone by gel filtration. This elevation in the amount of bound insulin resulted from increased number of insulin binding sites, and could not be attributed to an increased affinity of the receptors to insulin. In fact, pLys reduced 2-3-fold the affinity of insulin binding to its receptor as determined by equilibrium binding studies, and by monitoring the rate of exchange of bound [125I]insulin with unlabeled hormone. pLys induced specific interactions between insulin and its native receptor since other basic compounds such as histone, spermidine, polymixin B, compound 48/80, lysine, and arginine failed to reproduce its effects. pLys did not interact with the free ligand, nor did it promote interactions between insulin and denatured receptor forms. Furthermore, pLys did not induce binding of insulin to other proteins present in the partially purified receptor preparations. The effects of pLys were time and dose-dependent and were proportional to the pLys chain length. The longer the chain, the greater was the effect. Enhanced insulin binding and receptor beta-subunit autophosphorylation (in the presence of insulin) exhibited a similar dependency on the chain length of pLys. pLys effects on insulin binding were associated with formation of large protein aggregates that remained trapped at the top of Sephacryl S-300 columns. These aggregates contained substantial amounts of receptor-insulin complexes. Our results suggest that pLys induces formation of receptor clusters that create de novo insulin binding sites among adjacent receptor tetramers. Alternatively, formation of receptor aggregates might facilitate insulin binding to a soluble receptor subfraction that otherwise fails to bind the hormone.