Binding of the Steel factor (SLF) to the product of the c-kit proto-oncogene stimulates the receptor's intrinsic tyrosine kinase that phosphorylates a set of cytoplasmic signaling molecules. Germ-line mutations in the genes that encode the receptor or the ligand result in remarkably similar phenotypes that affect melanogenesis, erythropoiesis and gametogenesis in mice. We concentrated on the initial events of the signal transduction pathway that underlies these processes. The extracellular portion of Kit is comprised of five immunoglobulin-(Ig)-like domains. Ligand binding to this domain induces rapid and extensive dimerization of the receptor molecules in a mechanism that involves monovalent binding of the dimeric ligand, followed by an increase in receptors' affinity and gradual stabilization of the dimers. It thus appears that Kit has at least two functions: ligand binding and ligand-induced receptor dimerization, in addition to the kinase activity. Both functions are independent of the transmembrane and cytoplasmic domains, as a recombinant soluble ectodomain retained high affinity to SLF and ligand-dependent dimerization. In order to correlate these functions with specific structures, we employed ligand-competitive monoclonal antibodies, soluble deletion mutants of the ectodomain and chimeric human-mouse Kit proteins. These approaches indicated that the N-terminal three Ig-like domains constitute the binding site, whose core is the second domain. Further experiments suggested that a putative dimerization site is distinct from the binding cleft and may be located on the fourth Ig-like domain.